Euro­pean com­pa­nies min­imise risks from US-China trade war

Muscat Daily - - BUSINESS -

Euro­pean com­pa­nies in China have been able to min­imise the ef­fect from the tar­iff war be­tween Bei­jing and Washington, although some are con­sid­er­ing re­lo­cat­ing their busi­nesses, the EU Cham­ber of Com­merce said on Mon­day.

The two economies have been en­tan­gled in a lin­ger­ing trade war for over a year, which has weighed on the global econ­omy and re­sulted in hun­dreds of bil­lions of dol­lars in puni­tive tar­iffs slapped on two-way trade.

Euro­pean com­pa­nies in China ‘have ef­fec­tively negated the tar­iff ef­fects in a rel­a­tively short space of time’, said Jo­erg Wut­tke, pres­i­dent of the EU Cham­ber of Com­merce in China.

Many com­pa­nies have ‘ef­fec­tively side-stepped’ the steep tar­iffs by re­jig­ging their sup­ply chains and lev­er­ag­ing their global cor­po­rate net­works, the cham­ber said in a state­ment.

Ac­cord­ing to a sur­vey of its mem­bers re­leased on Mon­day, 64 per cent of re­spon­dents said they have not no­ticed ‘any change’ in their busi­ness as a re­sult of the trade war. An­other 10 per cent said they were ‘com­pletely af­fected’ by the trade war.

How­ever many Euro­pean com­pa­nies said they ex­pected the trade war to be ‘long-last­ing’, and 10 per cent have al­ready changed sup­pli­ers.

At the time of the sur­vey, an­other eight per­cent had al­ready re­lo­cated parts of their busi­ness out of China or were plan­ning to do so - mainly to else­where in south­east Asia - while 15 per cent had de­layed in­vest­ment or ex­pan­sion decisions be­cause of the trade war. This fig­ure was up from 6 per cent since the pre­vi­ous sur­vey in Jan­uary.

The re­port, which sur­veyed 174 com­pa­nies in China, was com­pleted in Septem­ber and is re­leased as China and the US con­tinue to ne­go­ti­ate a way to reach a ‘phase one’ trade deal.

In the ab­sence of any agree­ment, Washington is threat­en­ing to im­pose 15 per cent ad­di­tional cus­toms sur­charges on De­cem­ber 15, which will ap­ply to Chi­nese goods which have so far been spared.

Jo­erg Wut­tke

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