Survey: 87% of US firms in China plan to stay, ride out trade war

When President Donald Trump ordered American companies last week to break off ties with China, he gave a directive that conflicts with the plans of a vast majority of large U.S. firms doing business there.

That’s according to a survey of U.S.-China Business Council members. Eightyseven percent of respondents said they neither have moved nor plan to shift operations out of China, compared with 90% in a 2018 survey. Only 3% said their China operations were unprofitable, unchanged from a year ago.

“The majority of American companies surveyed remain committed to the China market and few are currently divesting existing operations,” according to the survey results released Thursday in Washington.

The survey, reaching about 100 members of the council, was conducted over three weeks in June. The relationship between the U.S. and Chinese governments has soured since, with on-again, off-again talks that have created uncertainty for investment plans. The survey was taken before Trump’s Aug. 23 tweet, which said: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Craig Allen, president of the council, said he didn’t interpret Trump’s tweet as pushing American companies that serve the Chinese market domestically to leave the country.

“We do not believe that he wishes to encourage other American companies that have successful operations in China to leave,” Allen said. “Our members are in China for the long term, none of them are anticipating orders to leave.”

The council’s survey showed that the majority of its members invest in China to access the domestic market and “less than a quarter of companies invest in China to export regionally or to the United States.”

The survey paints a grim picture of the effects of a trade war that’s now in its second year. Eighty-three percent of respondents said they didn’t curtail or stop planned investments over the past year, down from 92% a year ago.