US firms in China say trade war hurting their business: Survey

Most US companies operating in China say they've been hurt by the trade war between the world's two biggest economies but do not plan to exit the profitable Chinese market, according to a new survey by a prominent lobby group for US multinationals.

Some 81 percent of American companies reported being affected by trade tensions between Washington and Beijing, up from 73 percent last year, the US-China Business Council (USCBC) said in its annual survey released Thursday.

Nearly half of US companies, or 49 percent, say they've lost sales because of tariffs China has imposed on US products in retaliation for American import taxes, said the trade group, which represents more than 220 US companies ranging from Boeing to Archer Daniels Midland and Hewlett Packard.

“While no mass exodus from China is expected, continued tensions in the U.S.-China relationship, an unlevel playing field, and simmering retaliatory actions by Chinese authorities against American companies are creating an increasingly uncertain commercial environment,” the group said.

The survey showed that 47 percent of US firms believe Chinese authorities are using bureaucracy, including regulations and licenses, to discriminate against them.  

And 40 percent say they've lost sales in China because Chinese firms are worried about doing business with American companies in the middle of trade hostilities, a seven-fold increase over 2018.

Despite this, 88 percent say they have no plans to exit China, and 97 percent say their business with China is still profitable.

But the optimism in China is waning as the US-China trade war escalates and protectionism in the US domestic market persists. Only 52 percent expect their China revenue to increase this year, down from 78 percent last year and the lowest in the annual survey going back to 2010.

“Over the short term, the trade war is indeed hurting American companies,” said USCBC President Craig Allen, a former senior U.S. government official and expert on China. “Losing market share is easy and gaining it back is very, very difficult. These costs are real and potentially they are long-term.”

PressTV-US to hike existing, planned tariffs on Chinese imports

President Trump says the US will hike tariff rates on most imports from China in retaliation for Beijing's new duties on American goods.

The administration of US President Donald Trump has imposed 25 percent tariffs on $250 billion worth of Chinese imports and is planning to hit another $112 billion on Sunday. Trump has also labeled China a “currency manipulator,” adding fuel to the economic conflict. 

China has retaliated by hitting most of what the US exports to China.

The trade war has roiled global markets and raised the specter of a global recession.

Rising labor costs in China had already prompted some US companies with operations in China to begin looking for suppliers elsewhere before the trade war broke out in 2018, but experts say reciprocal tariffs have accelerated those moves.

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