(Bloomberg) — Most US companies with operations in China aren’t planning to leave the country despite the challenges posed by tariffs, according to a survey late last month by the American Chamber of Commerce in China.
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A 90-day truce reached in Geneva last month is being closely followed by American firms in China, with 21% saying they would shift more production and sales into China if US tariffs go back up, according to the AmCham survey of 112 companies. Another 13% would move production in China to other countries in that scenario, while 41% wouldn’t make significant changes, the results showed.
AmCham didn’t disclose the names or sizes of the companies that responded to the May 23-28 survey. The chamber’s members include a wide range of companies — including some of the biggest US brands like Microsoft Corp. and Coca-Cola Co. — but also smaller firms with less than $1 million in global revenue.
In another sign of how serious the trade war was at its peak in April to mid-May, about a third of those surveyed said the duties at the time made their operations unprofitable, while 7% said the US tariffs made them consider closing operations in China.
Read: Trump, Xi Agree to More Trade Talks as Rare Earths Dispute Cools
No respondents said they would shift production back to the US if tariffs jumped back to previous levels, which included 145% rates on many imports from China. About 11% reported seeing contract or order cancellations from local partners and clients after higher levies initially went into effect April 2, the survey found.
Washington and Beijing remain in the middle of trade negotiations, talks which appeared to be stalled before a call Thursday night US time between Presidents Donald Trump and Xi Jinping, during which the two leaders agreed to further discussions.
Trump’s top China envoy David Perdue has also sought to reassure American businesses in China that the countries will maintain commercial ties. The envoy told US business groups on Thursday that the Trump administration is looking for ways to cooperate with China and supports their presence in the country, according to people familiar with the matter.
Other highlights from the survey:
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A majority of US firms said tariffs were increasing costs, though about 27% reported they obtained product exemptions from the Chinese side. However, 4% reported the exemptions were recently removed or denied at customs, highlighting the opacity and confusion at the borders.
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About 22% of respondents said they have experienced export controls as a form of US government pressure since April 2, compared to 13% of respondents who reported facing Chinese export control pressure since then.
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About 12% of respondents reported experiencing issues around the export of rare earths. Out of 12 responding companies, five said they and their partners have been unable to export rare earths since May 12, another five said they were in the process of getting the required licenses, and the remaining two said they have been able to export.