fDi Markets Newswire:

Home / Locations / Asia-Pacific / China / Trade war bites harder from US side so far

Germany, Vietnam and Japan could pick up the trade slack, writes Adrienne Klasa.

As the first two rounds of tariffs begin to bite in the escalating US-China trade war, businesses around the globe are feeling the effects. But while the impact is global, those subject to US tariffs are feeling more pain so far according to a survey conducted by the US Chamber of Commerce in South China.

The survey of 219 companies across China, the US, Canada, the EU and different parts of Asia shows nearly 80% of them are already feeling substantial negative impacts from tariffs. The vast majority have operations in China. Negative effects from Trump administration tariffs are currently 10% higher than impacts on companies subject to China-imposed trade restrictions, according to the results.  

Top concerns on both sides, however, were increases in the prices of products, feeding through to lower profits for companies. “The primary concern at this point is that consumers in both nations may have to pay slightly more for many items now and likely much higher prices in the not-too-distant future,” says chamber president Harley Seyedin.

Almost 50% of the respondents say they have lost market share due to the trade war, with Germany, Vietnam and Japan emerging as the main competitors to replace US companies in value chains. Chinese companies are facing stiff competition from Vietnam, India and South Korea. Across locations, manufacturing companies are losing more market share than agribusinesses.

Despite the difficulties, while some companies are considering moving manufacturing lines outside China, very few would consider giving up the Chinese market entirely. Indeed, according to the survey, they see the size and potential for growth in China as their main avenue to counteract the negative effects of the breakdown in trade relations.

Mr Seyedin points out that the tit-for-tat nature of the trade war means US companies could lose out in the long term by getting shut out of China. The market “will eventually have five times as many consumers as the US”, he says.

This article is sourced from fDi Magazine
fDi Magazine

The fDi Report 2018: Free Download

The fDi Report 2018 promobox

Crossborder investment monitor

fDi Markets - Cross border investment monitor

fDi Markets is the only online database tracking crossborder greenfield investment covering all sectors and countries worldwide. It provides real-time monitoring of investment projects, capital investment and job creation with powerful tools to track and profile companies investing overseas.

Click here to find out more about fDi Markets

Corporate location benchmarking tool

fDi Benchmark is the only online tool to benchmark the competitiveness of countries and cities in over 50 sectors. Its comprehensive location data series covers the main cost and quality competitiveness indicators for over 300 locations around the world.

Click here to find out more about fDi Benchmark

Research report

fDi Intelligence provides customised reports and data research which deliver vital business intelligence to corporations, investment promotion agencies, economic development organisations, consulting firms and research institutions.

Find out more.