Nearly One-Third of U.S. Firms in China Mull Investment Delays Amid Trade Row, Poll Finds
A new survey of U.S. companies doing business in China found that 31.1% are considering delaying or canceling investment decisions over uncertainties created by tariffs and U.S.-China trade friction.
In addition, 50.8% of the companies surveyed said they anticipate a loss of profits because of the tariffs, while 47.1% said they are bracing for higher manufacturing costs.
“American companies are suffering both from China’s retaliatory tariffs, and — ironically — from U.S. tariffs designed to harm the Chinese economy,” the American Chamber of Commerce in China and the chamber’s Shanghai chapter said in a joint statement.
The survey is based on responses from 432 of the two chambers’ member companies and was conducted between Aug. 29 and Sept. 5, they said. The chambers didn’t release the names of respondents, but members of the chambers include China-based operations of Apple Inc., Boeing Co. and General Motors Co.
The U.S. and China have imposed 25% tariffs targeting $50 billion worth of each other’s products. The Trump administration is proposing tariffs of up to 25% on $200 billion worth of additional Chinese products, while China is ready to immediately respond with levies on $60 billion of U.S. goods.
The poll released Thursday also showed that should the U.S. levy tariffs on $200 billion more in Chinese goods, 74.3% of respondents would be negatively hit, while additional Chinese levies against $60 billion worth of U.S. products would negatively affect 67.6% of respondents.
Tariffs and trade tensions are prompting 6% of respondents to consider relocating manufacturing facilities back to the U.S., while 64.6% said they haven’t and don’t plan to relocate.
The poll also found that 30.9% of respondents are adjusting their supply chains to outside of the U.S., while 30.2% are making similar adjustments to outside of China.
On top of tariffs, U.S. companies have been concerned about non-tariff, “qualitative” measures that China could take against them. In the poll, 52.1% said they have experienced such measures, which include more inspections and slower customs clearance.
In a separate survey by the European Chamber of Commerce in China, also released Thursday, 17% of respondents said they were delaying further investment into China or expansion.
The Trump administration says the tariffs are aimed at overturning unfair trade practices, including measures that hamper the ability of U.S. companies to do business in China. Beijing contends it supports free and open trade.
“We welcome American enterprises and other foreign enterprises to invest and start businesses in China, and we are willing to share China’s development opportunities and dividends with them,” spokesman Geng Shuang said at the Foreign Ministry’s regular briefing Wednesday.
Source: Dow Jones