BUSINESS Tariff increase having negative impact on American companies in China: survey

BUSINESS

Tariff increase having negative impact on American companies in China: survey

CGTN

22:08, May 24, 2019

The US-China tariff disputes are having a negative impact on businesses of American companies in China, according to a survey jointly conducted by AmCham China and AmCham Shanghai.

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(File Photo: CGTN)

The US increased additional tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent earlier this month, and has threatened to raise tariffs on some $300 billion worth of Chinese imports yet to be hit.

The survey, conducted on May 16-20, received nearly 250 responses on the assessment of the impact of tariff increases on companies operating in China.

A total of 74.9 percent of respondents said the increases are having a negative impact on their businesses.

The impact of the tariffs is felt through lower demand for products, higher manufacturing costs, and higher sales prices for products, according to the survey.

To cope with the impact of the tariffs, some 35.3 percent of the surveyed companies are increasingly adopting an "In China, for China" strategy.

"In China, for China" is a strategy to localize manufacturing and sourcing within China to mainly serve the Chinese market. Such strategy constitutes a rational choice for many companies to insulate themselves from the effects of tariffs while maintaining their ability to pursue domestic market opportunities, the survey explains.

About 61.6 percent of the surveyed companies are manufacturing-related, 25.5 percent services, 3.8 percent retail and distribution, and 9.6 percent from other industries.

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