American companies in China suffer in Trump’s trade war

MORE than 70pc of US 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, a survey has found.

US 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 (AmCham) in South China, which surveyed 219 companies, one-third from the manufacturing sector.

Almost two-thirds of the companies said they were considering relocating production lines to outside of China, but only 1pc said they had any plans to establish manufacturing bases in North America.

The trade war is shifting both supply chains and industrial clusters, mostly towards Southeast Asia, the survey found. US companies reported facing increased competition from rivals in Vietnam, Germany and Japan, while Chinese companies said they were facing growing competition from Vietnam, India, the United States and South Korea.

Customers are slowing down orders or not placing them at all, Harley Seyedin, president of AmCham South China, told Reuters.

“It could very well be that people are holding back on placing orders until times are more certain or it could very well be that they are shifting to other competitors who are willing to offer cheaper products, even sometimes at a loss, in order to get market share,” he said. “One of the most difficult things about market share is once you lose it, it is very hard to get back.”

Companies in the wholesale and retail sectors have suffered the most from US tariffs, while agriculture-related businesses have been most hit by Chinese measures, the survey found. The survey was conducted between September 21 and October 10, shortly after the US imposed tariffs on another $200bn worth of Chinese goods.