China:US companies in China are bracing for more retaliatory pain from Beijing as the trade row between the two countries shows no sign of abating.
Observers said some American firms had reported higher costs and much greater regulatory scrutiny, and feared a major drop-off in business from rising nationalism.
The fallout follows a decision by Washington and then Beijing to impose 25 per cent tariffs on US$34 billion worth of imports from the other country. More duties are in the pipeline and the White House is weighing up whether to more than double tariffs on another US$200 billion worth of products from China.
There are indications that the tariffs are starting to bite. One US maker of mechanical equipment spare parts said the duties were expected to add US$6 million to the cost to its headquarters of buying products from its China operations.
“We are one of those who have been hit by a ‘precision strike’,” a Chinese executive in the company’s China office said.
In absolute terms, the tariff game is not one China can win, given it buys much less from the United States than the US imports from China. So Beijing has vowed to impose “qualitative” measures.
“The retaliation has been subtle and mostly involving hold-ups of incoming goods by China Customs and unnecessary delays in approvals for routine administrative matters,” said James Zimmerman, a partner in the Beijing office of international law firm Perkins Coie.
