In China, Manufacturers Feel the Heat of the Trade War

The world’s second-largest economy is embroiled in a trade war. That could change the calculus for firms doing business there.

Deep Dive

Phillip Orchard |December 27, 2018

Summary

The United States and China remain locked in a scrum over trade, present truce notwithstanding. Beijing is grappling for leverage while struggling to keep its own side intact. One of its greatest risks: Some of the biggest exporters in China could simply decide they want no part of this game, take their ball and go, if not home, to some other low-cost manufacturing hub.

According to a Peterson Institute for International Economics study, the first two rounds of U.S. tariffs disproportionately affected U.S. imports from China-based affiliates of multinational firms, rather than Chinese-owned firms. According to an October study conducted by the American Chamber of Commerce in South China – China’s most export-heavy region – around 85 percent of U.S. companies in the region said they were suffering from the new tariffs, compared to around 70 percent of their Chinese counterparts. In other words, the firms in China hurt most by the trade war are the ones most capable o

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In China, Manufacturers Feel the Heat of the Trade War

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In China, Manufacturers Feel the Heat of the Trade War