Tariff Photo:VCG

Although tariffs pose rising challenges to US companies in China, most companies are not planning to exit China, with none report shifting production back to the US, according to a latest survey released by the American Chamber of Commerce in China (AmCham China) on Friday.

A new Flash Survey from the AmCham China, conducted between May 23 and 28, reveals that escalating US-China trade tensions - particularly through tariffs - are placing increased pressure on US companies operating in China, according to a press release sent to the Global Times.

A majority of companies report that both US and Chinese tariffs are significantly increasing costs and reducing revenues, it said, noting that 54 percent of companies in the tech and R&D sector reported receiving tariff exemptions from the Chinese side, indicating selective relief measures for strategically important sectors.

"Despite the challenges, most companies are not planning to exit China. Instead, they are localizing operations or shifting some production to third countries. None report shifting production back to the US," noted the report.

Alvin Liu, Chair of AmCham China, mentioned that tariffs are an added challenge for member companies of AmCham China. "But the message from this survey is clear: most US companies are not giving up on China. Remaining engaged [in the Chinese market] is a strategic imperative - one that allows companies to stay competitive globally, adapt to shifting policies, and provide valuable on-the-ground insights that inform smarter, more balanced policymaking," Liu was quoted as saying.

Despite ongoing uncertainty amid the US' sweeping tariffs on its trade partners, US companies' unchanged confidence in the Chinese market underscores the complementarity of China-US industrial and supply chains and that multinationals need the vast Chinese market, He Weiwen, a senior fellow at the Center for China and Globalization, told the Global Times on Friday.

Data released by the US Department of Commerce in August 2024 shows that there were a total of 1,961 American enterprises (businesses holding a majority equity stake and having assets, sales, or net revenue of above $25 million) operating in China in 2022, with a combined total sales of $490.52 billion, up 4.3 percent year-on-year. 

China-US economic and trade cooperation has facilitated the upgrading of American industries. Through cooperation with China, American multinational corporations have boosted their international competitiveness by integrating the strengths of resources from both countries. For example, Apple designs and develops mobile phones in the US, assembles and manufactures them in China, and sells them in global markets, according to a white paper titled "China's Position on Some Issues Concerning China-US Economic and Trade Relations" released in April.

"China is stabilizer for global multinationals to achieve growth. Along with China's continuous high-level opening-up, foreign enterprises, including those from the US are expected to usher in a new round of growth opportunities," He said.

However, the US' tariffs have caused difficulties for the operation of US companies in China and hinders normal China-US trade exchanges, He said, noting that the US should remove all tariffs that violate WTO rules.

Chinese Commerce Ministry spokesperson He Yongqian said at a regular press conference on Thursday that China has urged the US to abandon its generalized and excessive use of the national security concept, and to collaborate with all parties in maintaining a rules-based multilateral trading system.

"The US should abandon the zero-sum mentality, address respective concerns through equal dialogue, and jointly maintain the stability of global industrial and supply chains," He Yongqian said.