Published: Fri, September 14, 2018
Economy | By

The trade war is already hurting U.S. companies in China

The trade war is already hurting U.S. companies in China

The current world trade system is not ideal and China supports reforms to it, including to the World Trade Organisation, to make it fairer and more effective, Beijing's top diplomat said.

Washington, Europe and other trading partners say those plans violate China's market-opening commitments.

Trump has already imposed 25-per cent customs duties on US$50 billion worth of Chinese goods, triggering a tit-for-tat response from Beijing.

On Thursday, the U.S. business lobbies AmCham China and AmCham Shanghai published a joint survey showing that the negative impact on U.S. companies in China of tit-for-tat tariffs Washington and Beijing have imposed on one another was "clear and far reaching".

Treasury Secretary Steve Mnuchin on Wednesday invited Chinese officials to a new round of talks later this month over USA threatened tariffs on Chinese exports worth $200 billion, and a Chinese Foreign Ministry spokesman told reporters Thursday that Beijing welcomed the invitation.

Every year, the US imports $500 billion worth of goods from China, while it ships only one-third of that amount to the East Asian country.

The U.S. has enjoyed near-record low joblessness and faster economic growth in 2018, while Beijing's economy faces growing long-term concerns, including a sharp decline in the value of its currency.

American companies in China are being hurt by tariffs in the growing trade war between Washington and Beijing, according to a survey of hundreds of firms, prompting the USA business lobbies behind the poll to urge the Trump administration to reconsider its approach.


The U.S. -China Business Council (USCBC), a nonpartisan non-profit representing around 200 American companies, told Observer that, in recent weeks, the council has been hearing from U.S. companies about delays and challenges getting licensing approvals in China. "AmCham China and AmCham Shanghai urge both governments to return to the negotiating table".

US President Trump said on Twitter on Thursday that the United States holds the upper hand in talks.

Meanwhile, almost a third of companies said they were considering delaying or canceling investments, underscoring the heightened uncertainty created by the trade tensions.

"Tariffs are already negatively impacting U.S. companies and the imposition of a proposed $200 billion tranche will bring a lot more pain", Eric Zheng, chairman of the American Chamber of Commerce in Shanghai, said Thursday in a statement. Things are likely to continue to slow with Donald Trump's threat made over the weekend that an additional round of tariffs targeting US$267 billion are already being lined up to follow the US$200 billion expected to go into effect within days.

About 30% of firms said they were shifting parts of their supply chains away from China and the United States to buy components from other places.

Also Thursday, the European Union Chamber of Commerce in China said one in six of its members that responded to a survey are delaying investment or expansion.

One of the highest-profile casualties of the trade war was United States chipmaker Qualcomm's (QCOM) $44 billion acquisition of Dutch rival NXP Semiconductors (NXPI), which China killed in July by refusing to grant it regulatory approval.

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