About 75% of American companies operating in China, has suffered from tariff wars between the two countries. This is evidenced by the results of a survey of chambers of Commerce of the United States in the Asian Republic. According to the study, companies declare a decrease in demand for products and increase production costs. According to experts, the greatest losses are small and medium businesses. Now, American firms operating in China, are forced to reduce investments and think about moving to another country.

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Washington’s decision to raise import duties on goods from China has hit not only Chinese enterprises, but also for working in the country to American companies. Almost 75% of producers in the U.S. record the negative impact of higher tariffs on their business. This is evidenced by the results of a survey of companies in the American chamber of Commerce in China (AmCham China) and American chamber of Commerce in Shanghai (AmCham Shanghai).

The study involved 250 American companies operating in China. Most of them (61.6%) to represent the industrial sector and 25.5% services, 3.8 per cent retail, 10% — other industries. The survey results are published on the official website of AmCham China.

“Trade confrontation jeopardized primarily small and medium US business, which owns the majority of American enterprises in China. We are talking about manufacturers with an annual turnover of up to $6-10 million Affected, for example, a joint venture for the production of unique equipment,” — said in an interview with RT, the head of the School of Oriental studies of the HSE Alexey Maslov.

According to experts, at present in the Chinese market are at least 1.5 thousand large companies with 100% U.S. capital. Much more on the territory of the Asian Republic is represented by joint ventures, shares in which are owned by businessmen from the United States, China, and sometimes other countries such as the UK. In General, as told Maslov, we are talking about tens of thousands of small and medium firms, where there is American capital.

As a result, according to experts, the aggravation of the trade war the total losses of working in China, American companies could exceed $100 billion.

Estimated by the AmCham China, tariff confrontation between Washington and Beijing most strongly reflected at industrial enterprises of the States in China. So, today, 81.5% of companies experiencing difficulties due to the increase of duties States, 85.2 percent suffer from reciprocal restrictions by the PRC.

Recall that in 2018, the United States imposed a tariff of 10% and 25% half of Chinese exports ($250 billion). In response, Beijing has imposed tariffs ranging from 5% to 10% on imports of American goods at $60 billion.

After 11 rounds of trade negotiations since the beginning of 2019 in may, the Washington raised the import duty on Chinese goods for a total volume of $200 billion. in addition, the President of the United States Donald trump also ordered to start the process of imposing tariffs on all other duty free goods from China. We are talking about products with a total value of $300 billion, the response from Beijing was swift — China will raise tariffs on U.S.-manufactured goods as of 1 June volume of $60 billion.

As noted RT interviewed experts, during the commercial cooperation the United States and China have built a production chain involving enterprises located on the territory of the States and in China. As a result, companies in both countries found themselves under attack.

For example, according to the survey of AmCham China, the increase in tariffs may lead to lower demand for products located in China, American businesses. This was reported by 52.1% of companies surveyed. 42.4 per cent said the potential growth of production costs, the 38.2% unable to raise prices for their products.

“As example, the situation with the supply in China is American frozen meat, which in China the sausage. Import duties of Beijing contribute to the rise in the cost of meat, which increases the cost of the final product. Sausage raw materials from the us demand may fall, because, for example, Argentina delivers their meat to China without duties,” — said Alexey Maslov.

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According to the expert, before the start of the trade war, the Chinese tax authorities went to meet firms from the United States, opening in China, its production, and were willing to discuss the possibility of tax cuts. However, to date, these discussions stopped.

Forced departure

According to the survey of AmCham China not to be subject to duties, nearly 40% of U.S. companies either consider the possibility of moving their businesses outside of China or have already made that decision. For some industries, the move is costly.

“Transferring high-tech production will be very expensive. China have established a professional industrial base, where company can produce any product. In China is established, the supply of resources, industrial processing, packaging and shipping to the markets. To create such a production in another country, you need to first develop the base of suppliers to build a supply chain Finance schemes, insurance,” — said in an interview with RT head of the sector of the economy and politics of China, IMEMO ran Sergey Lukonin.

According to experts, about moving from China to also think the headquarters of the large American consulting companies, doing business across Asia.

Firms prefer to stay in China, looking at other options to avoid additional charges from fees. So, with 35.3% of the companies reported that they had begun to focus on the domestic Chinese market. According to analysts, such actions will have a positive impact on the Chinese economy, but will lead to additional losses for the United States.

“The United States will have to look for new suppliers for various products and to try to make amends, may take up to three years. In the first year can drop the amount of goods shipped to the U.S. market. In addition, the average price of these goods will rise. In some categories, the price increase will be 5% to 10%. For Americans who are accustomed to cheap goods, it will be a serious blow”, — said Alexei Maslov.

According to experts, the Chinese market may be primarily to shift manufacturers of food, cosmetics, medicines, microchips and computers.

It is noteworthy that in an unstable situation the American companies in China are not at risk to expand their production. A third of respondents AmCham China companies reported that delaying decisions on new investments or completely abandoning investments.

As told by RT, Director of sales office “BCS” Vyacheslav Abramov, the overall tariff confrontation between the two countries will lead to slower GDP growth in the US and China by 0.25%, while the volume of imports of both countries will be reduced by 0.75%.

Analyst CC “FINAM” Leonid Delitsyn said that it was not only American firms in China, but other American manufacturers may lose up to 25% of sales in the Chinese market. The expert also warns of a possible decline in the market capitalization range of companies in the U.S., such as dealing with information and communication technologies. In this sector, the market capitalization is largely based not on current performance and future potential, including success on the growing Chinese market, said Leonid Delitsyn.