U.S. automakers in China are feeling the most pain as some American companies are getting hurt by completely new tariffs via both the White House as well as Beijing, according to a survey released which week via the American Chamber of Commerce in Shanghai as well as Beijing-based American Chamber of Commerce in China.
The automobile industry is actually inside the crosshairs of rising trade tensions between the two countries. In July, China raised the tariff on imports of U.S. autos to 40 percent just days after broadly cutting duties on foreign-made vehicles as well as parts to 15 percent via 25 percent.
The move came as both countries implemented tariffs which summer on $50 billion worth of goods via the various other. Vehicles as well as components appeared on both lists. U.S. President Donald Trump’s administration has also proposed duties on a different $0 billion worth of Chinese goods, while Beijing is actually planning counter tariffs on $60 billion worth of U.S. goods.
Industries of U.S. businesses operating in China which are most impacted by initial $50 billion tariffs via both sides
Source: AmCham China, AmCham Shanghai
The initial round of U.S. tariffs has affected 80.5 percent of survey respondents inside the automotive industry, as well as 75 percent say the Chinese duties have hit them. which makes the industry the only one to appear inside the ranks of the three or four most impacted by tariffs via both sides.
Overall, the survey found more than 60 percent of respondents are affected by the U.S. as well as Chinese tariffs, as well as significantly more expect negative impact via the proposed second round of duties.
U.S. companies which have supply chains running through China or which conduct a significant part of their operations there face “dual headwinds” via trade tensions, said Hannah Anderson, global market strategist at J.P. Morgan Asset Management. Such challenges “are especially strong for companies which engage in a high degree of specialization as well as invest significantly for innovation.”
The combined tariffs are reducing profits as well as increasing manufacturing costs for more than 60 percent of respondents inside the automotive industry, the survey found.
As a result of such business pressures, roughly half of respondents inside the automotive industry said they are looking to source components or assembly outside of China as well as the U.S., the survey said. A quarter of companies inside the industry are relocating China-based manufacturing to southeast Asia, the report said.