Survey: US Businesses in China Oppose Trade Tariffs

A huge portion of US businesses operating in China oppose the usage of tariffs in retaliation for the challenges that they face, from an uneven playing field to poor safeguard of intellectual property rights, based on a survey showed on Thursday.

Nearly 69 percent of the 434 respondents to the annual China Business Climate Survey of the American Chamber of Commerce in Shanghai opposed tariffs.  On the other hand, only 8.5 percent backed them, the group said.

“Resolving these challenges in an equitable manner is essential for the United States and China to have a healthy long-term commercial relationship that brings benefits to both our peoples,” the body said in a statement on the survey results.

The survey was conducted between April 10 and May 10.  It reflects the combination of key concerns and realities for American businesses in China during this time of too much uncertainty, while the Trump administration raises the ante in its trade spat with Beijing.

US President Donald Trump has pointed finger at China of unfair trade practices that provide its firms certain advantages, while hobbling American companies and building an outsized trade deficit for the United States.

Last Tuesday, the office of the US Trade Representative stated that it planned to impose 10 percent tariffs on an extra $200 billion worth of Chinese imports, from food products to tobacco, chemicals, coal, steel, and aluminum.

The survey indicated that even if US companies still face challenges when operating in China, 34 percent of respondents felt that Chinese government policies for foreign businesses had already improved.  This figure was higher than 28 percent recorded the previous year.

Inadequate intellectual property rights protection and the need to get license were the top two major regulatory challenges.  However, fewer companies felt like the both of these were hindrance, according to the 2018 poll, compared with the 2017 results.

In order to force greater market access, 42 percent of respondents favored investment reciprocity.  This was 40 percent higher from last year.  On the other hand, the number opposing it also grew up.  The opposition increased from 9 percent last year to 16 percent.  Even the numbers of those who were unsure rose to 44 percent from 31 percent. 

“Despite the relative optimism our members feel guarded about the future,” said AmCam in its statement.

Concerns such as government favoritism  for local firms as well as pressure on US ones in strategically important factors to shift technology were “stoking demand for reciprocity in the US-China relationship, even if our members generally oppose the use of retaliatory trade tariffs,” it added.

The largest operational challenge of the all was the costs that were getting more and more expensive.  This is an issue bugging more than 95 percent of respondents, according to the survey.  More than 85 percent of respondents felt that domestic competition was another challenge.

The proportion of companies that expect to be profitable was flat.  It was around 77 percent, though companies hinted that they were pulling back slightly on investment.

The survey also showed 53 percent of firms expanded their investment in 2017.  This was lower than the 55 percent recorded during the previous year.  This also highlighted a trend of diminished investment growth since the 2012 peak, during which 74 percent of respondents stated that they had boosted their investment in China.

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