US business group: Tariffs are hurting US firms in China

The American Chamber of Commerce says many US firms in China are considering relocating to other countries.

A new survey by the American Chamber of Commerce in China shows a large number of US firms want to relocate out of China [File: Johannes Eisele/AFP]

A major business lobby group in the United States has said increased tariffs between Washington and Beijing are hurting the competitiveness of US firms operating in China, adding that many are moving or planning to relocate their factories elsewhere in the world.

The American Chamber of Commerce in the People’s Republic of China (AmCham China) said in a report on Wednesday that US companies were facing increased government inspections, slower customs clearance and slower licence approvals.

Nearly 75 percent of the 250 companies that responded to the group’s survey said the recent tariff hikes by the US and China are having a negative effect on their businesses.

The survey was conducted after China and the US raised tariffs on each other’s imports earlier this month.

More than 40 percent were considering moving their manufacturing facilities out of China or had already done so, AmCham China said. Their preferred destinations were Southeast Asia and Mexico. Less than six percent of the respondents said they were considering moving to the US.

An earlier survey conducted between August and September 2018 showed that nearly 65 percent of respondents wanted to stay in China.

One in five US companies said they had faced increased inspections by Chinese authorities, while another 20 percent said their goods entering the country had been delayed by customs.

No breakthrough in sight

Economic relations between the world’s two biggest economies have become steadily worse since last May, when Chinese officials wanted major changes to the text of a proposed deal that the administration of US President Donald Trump said had been largely agreed. China has, in turn, accused the US of bullying it.

A subsequent round of talks ended with no breakthrough as Trump increased tariffs to 25 percent from 10 percent on $200bn worth of Chinese imports and threatened to impose duties on all remaining Chinese goods sold in the US.

China imposed a retaliatory tariff increase and the Trump administration followed up last week by adding telecom equipment giant Huawei to a trade blacklist that restricts its ability to buy US components and software and do business with other US companies. Washington has temporarily eased some trade restrictions on the company in an attempt to minimise the effect on customers.

No new trade talks have been scheduled, even though both Trump and Chinese President Xi Jinping are expected to attend the G20 Summit in Japan’s Osaka on June 28-29.

This file picture taken on May 15, 2019 shows a hostess welcoming journalists and guests to the Huawei database and storage product launch during a press conference at the Huawei Beijing Executive Bri
The US eased some restrictions on Chinese telecom equipment maker Huawei earlier this week [File: Fred Dufour/AFP]

Al Jazeera’s Adrian Brown, reporting from Beijing, said the tone of Chinese media recently has been one of “strident nationalism”.

“We’ve been seeing lots of old films glorifying China’s role in the war against the United States during the Korean War. We’ve been seeing a lot of songs appearing on social media, particularly on WeChat, songs that really attack the US and its role in the current trade friction with China. One of the songs has the catchy line that if the perpetrators want a fight, ‘we’ll beat their wits out of them’,” Brown said.

And it’s not just the media that have been defiant. Ren Zhengfei, Huawei’s founder, told state broadcaster CCTV on Tuesday: “The current practice of US politicians underestimates our strength.”

Source: Al Jazeera