U.S.-China Trade War Impacting Companies Worldwide,

AmCham South China Study Reveals

GUANGZHOU, CHINA – October 29, 2018 – The U.S.-China trade war and its tariff-counter-tariff style of negotiation is impacting not just the Chinese or U.S. businesses but also companies from many other countries as well, according to the new Special Report on the Impact of U.S. and Chinese Tariffs conducted by the American Chamber of Commerce in South China (AmCham South China).

The Special Report on the Impact of U.S. and Chinese Tariffs was conducted between September 21 and October 10, shortly after the additional US$200 billion in tariffs on Chinese products imposed by the Trump administration and the tariffs on US$60 billion on the U.S. products by the Chinese government. A total of 219 companies participated, of which one third are engaged in the manufacturing industry, more than one half in the service sector, and around one seventh in other industries. Roughly 95 percent of respondents have operations in China.

The Study shows the combined tariffs have negatively impacted various industries and companies not only from the U.S. and China, but also those from different origins, affecting business operations and resulting in substantial loss of business volume and market share. Participants in the Study include companies from China, U.S., Canada, European Union, Japan, Korea, Southeast Asia, Australia, New Zealand, and Hong Kong and Macau SARs. Nearly a half of the respondents report that they have lost market share to companies from other countries due to the trade war. Vietnam, Germany, and Japan are generally considered as the top three competitors particularly for the U.S. companies in imports and exports, while for the Chinese the competitions come from Vietnam, India, and Korea. Among all the participants, manufacturing companies are suffering more losses of market share than those in agribusiness.

Chamber president Dr. Harley Seyedin said the immediate impact has not yet been completely felt by these businesses since much of the orders for export items from both countries had been placed long in advance of the dispute and in many cases few, if any, alternative sourcing options are available. “The primary concerns at this point is that consumers in both nations may have to pay slightly more for many items now and likely much higher prices in the not too distant future,” Seyedin added.

According to the Study, although plans for relocation of manufacturing lines outside of China are considered by a majority of respondents, only very few participants will give up the Chinese market. Instead, most of the respondents see the expansion of the Chinese market as one of the most important remedies for the imposed tariffs, which sheds light on the priority of the Chinese market. Meanwhile, it is interesting to note that just one percent of the Study participants indicate any plans for establishing manufacturing in North America.

Both the U.S. and Chinese companies harbor low confidence in U.S.-China relations. Negative opinions towards imposed tariffs are widely shared by the business community. Meanwhile, more U.S. companies report that they are hurt in the trade tensions than their Chinese counterparts, particularly in terms of practical impact on the business operation, loss of business volume and market share. Nevertheless, the U.S. companies are more active in reacting towards the impact of the trade disputes.

Seyedin said he is less worried about the present than he is about the future ramifications between the U.S. and China. “What worries me the most is not so much the immediate impact,” Seyedin added, “but the potential long-term loss of access by Chinese companies to the U.S. market and, as a result, American companies’ access to a market that will eventually have five times as many consumers as the U.S.” He hopes that “the Study, representing the factual points of view of participating companies from countries spanning the globe, will cause the leaders from both sides of the equation to pause and rethink their strategies. We suggest, as countless others have, that all differences can and should be resolved through friendly discussions.”

About The American Chamber of Commerce in South China

The American Chamber of Commerce in South China (AmCham South China) is a non-partisan, non-profit organization dedicated to facilitating bilateral trade between the United States and the People’s Republic of China. Certified in 1995 by its parent organization, the U.S. Chamber of Commerce in Washington, D.C., AmCham South China represents more than 2,300 corporate and individual members, is governed by a fully-independent Board of Governors elected from its membership, and provides dynamic, on-the-ground support for American and International companies doing business in South China. In 2017, AmCham South China hosted nearly 10,000 business executives, government leaders and journalists from around the world at its briefings, seminars, committee meetings and social gatherings.

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