American Companies in China Shouldn’t Fear Tariffs. They Should Fear a Boycott.
What should give Starbucks executive chairman Howard Schultz nightmares? Imagine this: A Chinese netizen posts that, because of unfair American trade practices, it is patriotic to boycott Starbucks. State-run media outlets circulate the claim, and it ricochets around the Chinese Internet. Soon others heed the call.
The coffee behemoth has more than 3,000 stores across China, pledged to open 2,000 more by 2021 and recently opened its largest store in Shanghai. (I’m writing this article from a Starbucks in a mall in a quiet part of Shanghai; there is another Starbucks several hundred feet away.) Imagine that on May 1, China’s Labor Day, consumers stage a national walkout of Starbucks and pledge to instead patronize local coffee brands. Instead of representing sophisticated urbanism, Starbucks in China starts to seem like an avatar of American overreach and imperialism. When Schultz complains to Chinese leaders, they offer their condolences but say it’s the “will of the people.” So as Starbucks shares begin to drop, Schultz and other concerned U.S. food and beverage chief executives use their considerable lobbying presence to try to persuade the Trump administration to yield to Chinese demands.