White House

US business leaders don't see the 'phase one' China trade deal as a huge breakthrough

Key Points
  • The partial trade deal signed Wednesday between the U.S. and China is hardly an immediate success, according to trade groups representing many of the nation's biggest companies.
  • "We're certainly glad it's not getting worse," Stephen Lamar, president of American Apparel & Footwear Association, told CNBC.
  • A Chamber of Commerce executive praised some tariff reduction, but said, "We've got a lot of work to do."
VIDEO2:5202:52
US-China phase 1 deal provides apparel, footwear industry limited tariff relief

The partial trade deal signed Wednesday between the U.S. and China is hardly an immediate success, according to trade groups representing many of the nation's biggest companies.

"We're certainly glad it's not getting worse," Stephen Lamar, president of American Apparel & Footwear Association, said Thursday on CNBC's "The Exchange." "The reality is all the goods that were being tariffed the day before the deal was announced are going to be tariffed on Feb. 14, which is the first day the deal takes effect."

Neil Bradley, the Chamber of Commerce's executive vice president and chief policy officer, said the group's members recognize Wednesday's agreement "for what it is."

"[It's] phase one in what has to be a multi-phase deal," he said on "The Exchange." "The most important thing is phase one moving to phase two, and in phase two we can really tackle the key fundamental problems that are driving this trade dispute."

Like Lamar, Bradley noted there are still tariffs in place on "a large variety of goods that we import."

But he emphasized the "phase one" deal delivered good news on the possibility of new tariffs and tariff reduction, with the Trump administration agreeing to cut duties on $120 billion in products to 7.5%. It also canceled tariffs that had been scheduled to take effect in December.

Bradley, who previously worked in the office of House Minority Leader Kevin McCarthy, R-Calif., said he is eager to see future negotiations between the U.S. and China result in further progress on concerns around intellectual property theft and state subsidies for Chinese companies.

VIDEO3:1003:10
Phase 1 US-China trade deal not a win for small business: US Chamber

"If we can resolve those, then we can remove the tariffs that have been put in place. That's the ultimate goal," he said. "We took a step forward toward that, but we've got a lot of work to do."

President Donald Trump called the phase one deal "transformative" and said it was "righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families."

In the more than 18-month trade dispute between the world's two largest economies, Lamar said, his organization's members, which include Dillard's and Levi Strauss & Co., have been working to reduce the impact of tariffs on both their businesses and their customers.

"Tariff mitigation is the name of the game," said Lamar, who previously worked in the U.S. Department of Commerce. "People are being very creative to try and avoid these tariffs."

To that end, Lamar criticized the use of tariffs as an "enforcement tool" to ensure China lives up to its end of the deal.

"Like anyone else, we want to hold China accountable," he said. "But we don't think taxing our own citizens is the best way to do that."

The deal signed Wednesday contains elements designed to address issues that concerned the White House, as well as members of Congress.

Those issues include intellectual property theft and forced technology transfers, according to text released by the White House. It also says China agreed to a $200 billion increase in purchases of U.S. goods in the next two years — a priority for Trump.

— CNBC's Jacob Pramuk contributed to this report.