US firms in China feeling the heat from trade war

US firms in China feeling the heat from trade war

22/05/19

Luke Foddy, Communications Manager

Almost three quarters of US companies operating in China are experiencing negative effects from the ongoing trade war, according to a new report by the American Chamber of Commerce in China and Shanghai (AmCham China).

A survey of almost 250 US firms trading in China found that 74.9 per cent have experienced adverse impacts from the escalation in tensions, ranging from delays in administrative processes, such as licence applications, to slower customs clearances and an increase in inspections.

A third of respondents said they were delaying or cancelling investment decisions in China, according to CNBC.

Speaking to Bloomberg, Timothy Stratford, Chairman of AmCham China and former US Assistant Trade Representative, said “people aren’t happy” about the escalation, which is “making American companies less competitive” in China.

“It’s a very strong signal that people need to be reassessing their investment plans and sourcing decisions,” he said.

Stratford added that there are anxieties around the recent moves against Chinese telecoms firm Huawei, which has effectively been banned from operating in the US in light of a presidential edict last week.

“There’s certainly a concern, especially in the wake of the Huawei decision, that individual companies may be targeted for retaliatory actions,” Stratford said.

The AmCham China report was followed by a joint letter by 173 major footwear companies including Nike and Adidas that cited “catastrophic” and “unfathomable” consequences for consumers caused by rising tariffs, the BBC reports.

“It is time to bring the trade war to an end,” the companies write – a further indication that the trade war is hitting business hard.