Results of a survey by two business lobby groups shows that at least 75 per cent of all of the Unites States based companies operational in China are expecting to get hit by the escalating trade between the countries even as both the administrations prepare to impose more tariffs on each others’ goods.
About half of those who expect their business being impacted also expect some for m of significant disruption. This was revealed in a survey that was conducted by the American chambers of commerce (AmCham) in Beijing and Shanghai. The report found that US businesses in China are worried about decreasing profits, enhanced costs of production, decreased demand for their products and job losses.
Any form of new tariffs would have a “negative impact” on their businesses, opined 74.3 per cent of the 430 firms that participated in the survey. The survey report also concluded that over 47 per cent of the firms that were surveyed are awaiting a “strong negative impact” from any form of new tariffs that would be imposed by the US administration on Chinese products which has been pegged as $200 billion worth according to US President Donald Trump.
The outcome of the survey is very different from a similar survey that was carried out by AmCham in another survey of US companies operating in China about two months ago when the business body noted that there was an apparent upbeat among US companies at the beginning of the imposition of the tariffs as about 62 per cent of the respondents then had opined that they expected that their investments would increase ion China and were expecting to take advantage of the opening of multiple sectors to foreign companies in one of the largest markets in the world.
“If almost a half of American companies anticipate a strong negative impact from the next round of US tariffs, then the US administration will be hurting the companies it should be helping,” Eric Zheng, chairman of AmCham Shanghai, said in a statement. “We support President Trump’s efforts to reset US-China trade relations, address long-standing inequities and level the playing field. But we can do so through means other than blanket tariffs.”
Since the trade spat with China started, the US under Trump has imposed import tariffs on Chinese goods worth $50 billion. There is all possibility that the Trump administration will carry out its threat of imposing another round of tariffs on Chinese goods worth $200 billion which would include a wide range of products from selfie sticks to semiconductors.
Retaliatory tariffs in equal measure have also been imposed by China on import of American goods.
The survey also showed that the staff strength has already been reduced by 11.8 per4 cent of the US firms in China.
“The US administration runs the risk of a downward spiral of attack and counter attack, benefiting no one,” said William Zarit, chairman of Beijing-based AmCham China, in a statement.
(Adapted from SCMP.com)