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American multinational corporations in China adjust to trade war risks, analysis shows
LAWRENCE — The U.S.-China trade war has pitted the world’s two biggest economies against each other, and many American multinational corporations (MNCs) find themselves stuck in between. A new scholarly article from a University of Kansas professor of political science addresses the question: Which factors make some MNCs take political action in response to the U.S.-China trade war and cause others to stay on the sidelines?
KU announces Beinecke scholarship nominee
LAWRENCE — The University of Kansas has nominated Cherin Russell, a junior in English and active community volunteer from Lawrence, for the Beinecke Scholarship Program. Each year the prestigious program offers 20 awards to undergraduates who intend to pursue a research-focused master’s or doctoral program in the arts, humanities or social sciences. Award recipients will be announced in April.
First dean candidate for KU Libraries to present Feb. 13
LAWRENCE — The first of four candidates for the University of Kansas Libraries dean position will give a public presentation at 2:30 p.m. Feb. 13 in Watson Library, Watson 3 West Event Space. Nadia Ghasedi currently serves as the associate university librarian for special collections services division at Washington University in St. Louis.
Full stories below.
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Contact: Jon Niccum, KU News Service, 785-864-7633, [email protected]
American multinational corporations in China adjust to trade war risks, analysis shows
LAWRENCE — The U.S.-China trade war has pitted the world’s two biggest economies against each other. Many American multinational corporations (MNCs) find themselves stuck in between.
“China is not an easy market for multinationals, and it has become more challenging as a result of the trade war,” said Jack Zhang, assistant professor of political science at the University of Kansas.
His new article titled “In the Middle: American Multinationals in China and Trade War Politics” addresses the question: Which factors make some MNCs take political action in response to the U.S.-China trade war and cause others to stay on the sidelines? This analysis reveals that business models, ownership structure, experience in China and size of capital investments each shape how embedded firms perceive political risk. It appears in Business and Politics.
“In the Middle,” co-written with KU doctoral student Rigao Liu and Samantha Vortherms, assistant professor at the University of California-Irvine, is part of a series the team is working on that attempts to explain the determinants of firm exit or divestment out of China.
“This paper asks if you’re an American company, and you have operations in China, how do you choose among a menu of options to respond to the trade war?” Zhang said. “Do you follow that decoupling logic and say, ‘China is getting riskier. Let’s go somewhere else.’ Or do you try to influence policy in the U.S. and say, ‘These tariffs are not working for us.’”
Surprisingly, his research found that companies avoid either of these drastic actions. They neither voice dissatisfaction with this policy, nor do they decouple their supply chains or unravel operations. Primarily, the company embraces a third category that Zhang terms “loyalty.” They stay in China but also try other tactics to potentially mitigate tariffs.
Zhang based his research on two key datasets. The first is the annual registration filed with the Chinese Ministry of Commerce to identify foreign-invested enterprises from 2014 to 2019. The second consists of the observed political behaviors of U.S. firms that responded to Section 301 tariffs by submitting a comment, testifying in a hearing, filing a tariff exclusion request or lobbying the Office of the United States Trade Representative in 2018 and 2019.
According to his article, tariffs have “done more harm than good.”
“We’ve understood in economics for a really long time that tariffs generate deadweight losses. They act as a tax on consumers, essentially,” he said. “The reality is that American companies are paying tariffs when they import goods, and those costs are passed on to American consumers.”
Despite these costs, tariffs have not generated the leverage to alter MNC behavior.
Zhang said, “The Trump administration very much stated, ‘We’re making the environment in China riskier. We’re highlighting these risks to U.S. multinationals. And the way to not have to deal with that is to just move back to the U.S.’ But very few multinationals engaged in that.”
Yet from the Chinese perspective — based on past instances when MNCs prior to China’s World Trade Organization accession in the late 1990s were strong advocates of economic relations with their country — leaders assumed multinationals would be in China’s corner and voice dissatisfaction with U.S. policy.
“They hoped multinationals would help put a quick kibosh on the trade war,” Zhang said. “That has not happened either.”
He wrote that larger, more experienced MNCs are resilient to both tariffs and to political pressure to decouple from China “due to privileged access to various regulatory loopholes as well as greater market power.”
Is there an example of a major multinational pulling out of China recently?
“A large one that pulled out entirely? I can’t think of anyone directly that would be related to tariffs,” Zhang said. “Some have unraveled trade operations in the tech side for security reasons or due to local competition — American tech companies have been notoriously unsuccessful there. But Uber in 2016 is probably the last big exit.”
A professor at KU since 2019, Zhang is also the founder and director of the KU Trade War Lab. His research explores the political economy of trade and conflict in East Asia with a focus on explaining why interdependent countries use military versus economic coercion in foreign policy disputes.
Zhang said the biggest takeaway from this paper is that MNCs will take care of their own interests and reliably put profits first. They are reluctant to serve the interests of politicians.
“There is always the risk of misalignment when we think about multinational investments as extensions of national policy,” he said. “Even policies that are well-intentioned from a national foreign policy perspective, when you filter that through the prism of how companies need to operate to satisfy shareholders, it will produce perverse outcomes for both sets of governments in ways they did not anticipate.”
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Contact: Erin Wolfram, Academic Success, 785-864-2308, [email protected]
KU announces Beinecke scholarship nominee
LAWRENCE — The University of Kansas has nominated a junior for the Beinecke Scholarship Program. Each year the Beinecke Scholarship offers 20 scholarships to undergraduates who intend to pursue a research-focused master’s or doctoral program in the arts, humanities or social sciences. Selected students receive $30,000 to be used for graduate study and $4,000 in their senior year. Award recipients will be announced in April.
KU’s nominee is Cherin Russell, from Lawrence. She is the daughter of Elizabeth Coleman and a graduate of Lawrence High School. Russell is a McNair Scholar majoring in English and plans to earn a master’s degree in interdisciplinary studies and become a grant writer at a consultancy or environmental nonprofit. She recently joined the volunteer team at the Ballard Center to assist with grant writing and environmental concerns. Russell also serves as a mentor within KU’s Academic Retention & Engagement Center and a tutor for the Academic Learning Center. Russell was awarded second place for the Helen Rhoda Hoopes Award for best English undergraduate essay written by a woman and earned the Certificate of Excellence in French Studies three semesters in a row, the TRIO 1st Year Achievement Award and the Paul B. Lawson Memorial Scholarship given to outstanding juniors. She has been a volunteer and advocate in the Lawrence community for more than 10 years and currently serves as an advocate at KU for nontraditional students and students with invisible disabilities.
Only 135 colleges and universities around the country are invited to nominate one student for the scholarship each year. KU is the only participating institution in Kansas. At KU, the nomination process is coordinated by the Office of Fellowships.
The Beinecke Scholarship Program was established in 1971 by the board of directors of the Sperry and Hutchinson Company to honor Edwin, Frederick, and Walter Beinecke. The board created an endowment to provide substantial scholarships for the graduate education of young people of exceptional promise. Candidates should be U.S. citizens and college juniors who demonstrate superior standards of intellectual ability, scholastic achievement and personal promise during their undergraduate career.
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Contact: Evan Riggs, Office of the Provost, 785-864-1085, [email protected], @KUProvost
First dean candidate for KU Libraries to present Feb. 13
LAWRENCE — The first candidate for the University of Kansas Libraries dean position will give a public presentation at 2:30 p.m. Feb. 13 in Watson Library, Watson 3 West Event Space.
The presentation will be livestreamed, and the passcode is 995514.
Nadia Ghasedi is the first of four candidates who will describe her vision and aspiration for the role of libraries in the next 10 years at a flagship university. She currently serves as the associate university librarian for special collections services division at Washington University in St. Louis, a position she’s held since 2016.
The university is seeking a leader who will guide KU Libraries beyond its traditional responsibilities to meet the emerging needs of the university and the community it serves.
The other candidates will be announced approximately two business days before their respective campus visits. All public presentations will take place in Watson Library in the Watson 3 West Event Space and will be livestreamed. Public presentations for each of the candidates are scheduled for the following dates:
1. Nadia Ghasedi: 2:30-3:30 p.m. Feb. 13
2. Candidate 2: 3:30-4:30 p.m. Feb. 16
3. Candidate 3: 3-4 p.m. Feb. 21
4. Candidate 4: 3-4 p.m. Feb. 23
Faculty, staff and students are encouraged to offer their impressions and observations of each candidate online. There will be a limited-time feedback survey where members of the KU community will have the chance to share their opinion on each candidate. Feedback on Ghasedi’s presentation is due by 5 p.m. Feb. 16. A recording of her presentation will be available the morning after the presentation on the search website until the survey closes.
Additional search information is also available on the Provost Office website.
Each candidate will meet with Chancellor Douglas A. Girod, Provost and Executive Vice Chancellor Barbara A. Bichelmeyer, senior administrators, KU Endowment, KU Alumni Association, University Governance and KU Libraries groups, including faculty, staff and the board of advocates. Each candidate will tour KU Libraries’ facilities.
A 16-year employee at Washington University, Ghasedi oversees the collection development for seven distinct areas, which include both physical and digital collections and associated processing, access and use, and reference and instruction. Ghasedi oversees University Libraries-wide physical and digital preservation, digitization and exhibition programs. She is a member of the University Libraries senior leadership team.
Ghasedi has contributed to numerous initiatives with University Libraries, such as building a framework for managerial performance, conducting a workforce analysis, completing and executing strategic planning and designing and implementing organizational restructurings.
Ghasedi has served as principal investigator on numerous grant-funded projects, including Eyes on the Prize Preservation Project, a four-year project funded by the Andrew W. Mellon Foundation. She aided in the effort to complete the film preservation of part one of the award-winning documentary series and associated interviews.
Prior to her current position, she served as an associate university librarian for collection management and access services division, head of the visual media research lab and film media archivist and cataloging and preservation archivist at Washington University. Ghasedi is a member of the American Library Association, the oldest and largest library association in the world.
Ghasedi holds an executive Master of Business Administration from Washington University and a certificate in film preservation from the L. Jeffrey Selznick School of Film Preservation at the George Eastman Museum in Rochester, New York. She also earned a master’s degree in information science and learning technologies with an emphasis in library science from the University of Missouri and a bachelor’s degree in communication from the University of Wisconsin.
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