US firms in China feel "clearly and deeply" in the trade war: investigation

SHANGHAI (Reuters) – US companies in China are penalized by rising tariffs in the Washington-Beijing trade war, prompting US lobbyists to ask the administration Trump.

The United States and China have imposed tariffs of $ 50 billion on their products since July as trade friction between the world's two largest economies worsened, despite several rounds of negotiations.

President Donald Trump criticized China's record trade surplus with the United States and demanded that Beijing cut it immediately, threatening new tariffs on an additional $ 200 million or more.

The negative impact of tariffs on US companies has been "clear and far-reaching," according to the joint survey released by AmCham China and AmCham Shanghai on Thursday.

More than 60 percent of US companies surveyed said US tariffs were already affecting their business operations, while a similar percentage said China's tariffs on US products were affecting business.

Businesses said that tariffs weighed on profits, reduced demand for their products and increased production costs.

About three out of four businesses surveyed said that duties on an additional $ 200 billion worth of Chinese products would further damage business, and nearly 70 percent said that additional Chinese retaliation rates would be bad for business.

"This survey confirms our concerns: tariffs are already having a negative impact on US companies and the proposed $ 200 billion tax bill will cause much more suffering," said Eric Zheng, president of AmCham Shanghai.

"If nearly half of US companies anticipate a significant negative impact from the next round of US tariffs, the US administration will hurt companies it should help," he said.

"We support President Trump's efforts to restore trade relations between the United States and China, resolve long-standing inequities and level the playing field. But we can do it by means other than global tariffs.

On Wednesday, Larry Kudlow, who heads the White House Economic Council, told Fox Business Network that Treasury Secretary Steven Mnuchin had sent an invitation to top Chinese officials to resume trade talks.

More than 430 companies responded to the survey between Aug. 29 and Sept. 5, with Ken Jarrett, President of AmCham Shanghai, reporting being partially responsible for providing AmCham with data for meetings with congress members later this month.

China may not be able to match the US dollar to one dollar to one dollar and warned it would take further action.

More than 52% of those responding to the survey said they were suffering the consequences of these measures, mainly through more rigorous inspections, slower clearance and "other complications of increased bureaucratic oversight" .

Nearly two-thirds of the companies that responded did not move and did not plan to move their manufacturing facilities away from China either. But among these, the main destinations were Southeast Asia and the Indian subcontinent.

Only 6 percent said they planned to relocate to the United States, according to the survey.

At the same time, nearly a third of companies said they would consider delaying or canceling their investments, highlighting the heightened uncertainty created by trade tensions.

About 30% said they were adjusting supply chains seeking to supply components and / or assemblies outside the US, and about the same number were looking for Supply components and / or assemblies out of China.

On Wednesday, more than 60 US industry groups launched a coalition – American for Free Trade – to fight tariffs.