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American businesses in China: Tariffs are hurting us

Key Points
  • Nearly three-fourths, or 74.9%, of almost 250 respondents to a survey held from May 16 to May 20 said the increases in U.S. and Chinese tariffs are having a negative impact on their business, according to a report released Wednesday by AmCham Shanghai and AmCham China in Beijing. 
  • About one in five said they have experienced increased inspections and slower customs clearance.
  • The greatest impact of the combined tariffs is decreased demand for products, followed by increased manufacturing costs, according to the joint AmCham survey.
President Donald Trump waves during joint statements with China's President Xi Jinping at the Great Hall of the People in Beijing, China, November 9, 2017.
Thomas Peter | Reuters

U.S. President Donald Trump's latest tariff increase — and Beijing's plans to counter them — are hitting U.S. companies in China.

Nearly three-fourths, or 74.9%, of almost 250 respondents to a survey held from May 16 to May 20 said the increases in American and Chinese tariffs are having a negative impact on their business, according to a report released Wednesday by the American Chamber of Commerce in Shanghai and the Beijing-based American Chamber of Commerce in China.

"The negative impact of tariffs is clear and hurting the competitiveness of American companies in China," a release from the groups said.

The Chinese authorities also appear to be making operations more difficult for some companies.

About one in five said they have experienced increased inspections and slower customs clearance. Roughly 14% of respondents said approval for licenses or other application has been slower — in addition to other complications from increased bureaucratic oversight or regulatory scrutiny.

Of the survey participants, 61.6% were manufacturing-related, 25.5% were in the services sector, 3.8% were in retail and distribution and 9.6% came from other industries.

The trade dispute between the world's two largest economies had appeared to be nearing a deal — until those hopes were dashed earlier this month.

The U.S. raised tariffs on $200 billion worth of Chinese goods to 25% from 10% on May 10. Beijing responded a few days later with duties ranging from 5% to 25% on $60 billion worth of U.S. goods, set to take effect June 1.

The greatest impact of the combined tariffs is decreased demand for products, followed by increased manufacturing costs, according to the joint AmCham survey. About 35% of respondents are restructuring their China operations to reach the local market by increasing domestic sourcing or production, and roughly a third said they are delaying or canceling investment decisions in the country.

Just 10% said they planned to apply for an exclusion from Chinese tariffs, while 15.1% indicated they would apply for exemptions from U.S. tariffs, the report said. The majority were either unsure or said they would not apply.