U.S. companies have been hit hard by the U.S. president’s tariff increase, with fears growing that an escalation of rivalry could adversely affect business.
On Wednesday, the American Chamber of Commerce in Shanghai, and its counterpart in Beijing released a survey report that took in the perspective of nearly 250 companies.
According to the survey, conducted between May 16 and 20, 74.9 percent of the respondents said that U.S. and China tariffs on goods were negatively affecting their businesses.
The group noted that the American companies based in China are openly suffering and they cannot compete favorably due to the tariffs imposed on products.
Chinese officials have reportedly retaliated to hike in U.S. tariffs on China goods by making it extremely difficult and cumbersome for American companies to handle their operations.
Reporting on the challenges they are facing, some companies said they have been inspected severally, more than the norm and could not get custom clearance faster.
About 14 percent of those who spoke said their license approval, among other regulatory applications, has become a real headache in the country. They have also faced increased bureaucratic supervision and regulatory scrutiny.
Out of the 74.9 percent survey respondents, 3.8 percent came from the retail and distribution industry, 25.5 percent from the services sector. The largest group of contributors, 61 percent of companies who complained, was from the manufacturing sector.
Other industries made up 9.6 percent.
Before this month, there were hopes to end the trade wars between the two economic giants but they have since died following the recent attacks using tariffs.
On May 10, the U.S president imposed a tariff hike from 10 percent to 25 percent on Chinese goods estimated to be worth $200 billion. Beijing didn’t go silent on this, and they hiked tariffs on U.S. goods from 5 percent to 25 percent. The new tariffs are set to begin working from June 1.
AmCham did a study which shows that the highest effect is realized in low demand for products and increased cost of manufacturing from both sides.
Some companies have threatened to cancel investment in China. 10 percent of the companies have planned to file for Chinese tariff exclusion and 15.1 percent are considering applying for the U.S. tariff exemption.