U.S. Automakers Are Taking Hits From Both Sides in Trump’s Trade War With China

September 14, 2018, 11:18 AM UTC

In the ongoing trade dispute between the U.S. and China, perhaps no companies are more affected than American automakers that are manufacturing their cars in China.

The biggest American business groups in China, AmCham China and AmCham Shanghai, jointly issued a survey Thursday that showed widespread impacts from the U.S.’s tariffs on China, and the resulting Chinese tariffs on the U.S.

The effects are being particularly felt in the automotive industry. Of the respondents to the survey from that sector, 80.5% said they had been hit by the American tariffs, and 75% by the Chinese retaliation—each side has levied tariffs on imports of vehicles and components from the other.

Zoom out from the automotive sector, and more than 60% of American companies in China said they have been affected by the tit-for-tat spat.

In short, costs are up and profits are down, and the situation would only get worse if President Trump follows through with his threat to levy tariffs on a further $200 billion worth of imports from China, respondents said—74.3% said they expected to be negatively affected by that broadside, and 67.6% said they expected to take damage from the Chinese response.

“This survey affirms our concerns: tariffs are already negatively impacting U.S. companies and the imposition of a proposed $200 billion tranche will bring a lot more pain,” said AmCham Shanghai chairman Eric Zheng. “If almost a half of American companies anticipate a strong negative impact from the next round of U.S. tariffs, then the U.S. administration will be hurting the companies it should be helping.”

Zheng expressed support for Trump’s wider aim of levelling the playing field between the U.S. and China, and addressing “long-standing inequities.” However, he added, “we can do so through means other than blanket tariffs.”

The White House faces plenty of opposition toward fresh tariffs back home, too, with companies such as Cisco and Hewlett-Packard recently pleading with U.S. Trade Representative Robert Lighthizer to change tack. Small businesses are being hurt by the rising cost of imports from China, and many expect the next tranche would start being felt in American consumers’ wallets.