Trump’s tariffs are taking a huge bite on corporate profits, but the US will not benefit at all.
Reuters reports Many U.S. Firms in China Eyeing Relocation as Trade War Bites.
U.S. companies operating in China believe they are suffering more from the trade dispute than firms from other countries, according to the poll by the American Chamber of Commerce in South China, which surveyed 219 companies, one-third from the manufacturing sector.
More than 70 percent of U.S. firms operating in southern China are considering delaying further investment there and moving some or all of their manufacturing to other countries as the trade war bites into profits.
Sixty-four percent of the companies said they were considering relocating production lines to outside of China, but only 1 percent said they had any plans to establish manufacturing bases in North America.
Nearly 80 percent of the survey respondents said the tariffs have knocked their businesses, with U.S. tariffs having slightly more impact than the Chinese ones.
One-third of companies estimated the trade dispute had reduced business volumes ranging from $1 million to $50 million, while nearly one in 10 manufacturers reported high-volume business losses of $250 million or more.
Nearly half the companies surveyed also said there had been an increase in non-tariff barriers, including increased bureaucratic oversight and slower customs clearance.
Two-Way Pain
?
It’s clear that Trump has managed to inflict some pain on China.
It’s equally clear that US companies doing business in China are also suffering.
Winning
This we call “winning” even though almost none of that business is headed for the US or even North America.
Rather, Vietnam, India, and other emerging markets will benefit.
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