Tariff Spat Hurting US Firms On The Mainland: Poll

Most US businesses on the mainland are hurting from the tariffs war between the two countries, forcing some companies to relocate abroad or refocus their business, a survey showed on Wednesday.

In a poll by the American Chamber of Commerce in China and its sister organisation in Shanghai, three-quarters of the 250 firms surveyed said increases in US and Chinese tariffs are having a "negative impact" on their business as orders were drying up owing to rising manufacturing costs and prices.

Nearly half said they have experienced non-tariff retaliatory measures on the mainland since last year, with one in five reporting increased inspections and a similar amount enduring slower customs clearance. And 14 percent complained of other complications from increased bureaucratic oversight and regulatory scrutiny.

The United States and China have so far exchanged tariffs on more than US$360 billion in two-way trade.

The poll was conducted from May 16 to May 20, days after the United States more than doubled duties on US$200 billion in Chinese goods and Beijing retaliated with higher duties on US$60 billion in American products.

The poll showed that 35 percent of companies would adapt an "in China for China" strategy – sourcing within China and targeting the domestic market – as a result of tariffs.

But more than 40 percent said they were "considering or have relocated" production facilities outside China, with Mexico and Southeast Asia the preferred alternatives for manufacturing.

Fewer than 6 percent said they have moved or are considering moving their factories to the United States, undercutting President Donald Trump's hopes of seeing American companies move production back home.

More than half of respondents said they favour protracted trade talks to continue in order to address "structural issues allowing them to operate on a more level playing field".

Others wanted a quick deal and a return to the "pre-tariff predictability and stability" that existed before the world's two biggest economies locked horns. (AFP)