FILE PHOTO: U.S. President Donald Trump holds his signed memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington, US.
Most U.S. businesses operating in China oppose the use of tariffs in retaliation for the challenges they face, from an uneven playing field to poor protection of intellectual property rights, a survey showed on Thursday.
Almost 69 percent of the 434 respondents to the annual China Business Climate Survey of the American Chamber of Commerce in Shanghai opposed tariffs, while just 8.5 percent backed them, the body said.
"Resolving these challenges in an equitable manner is essential for the United States and China to have a healthy long-term commercial relationship that brings benefits to both our peoples," it said in a statement on the survey results.
U.S. stock index futures dropped sharply on Wednesday after the United States threatened tariffs on an additional $200 billion worth of Chinese goods, dampening hopes of a compromise on trade.China's commerce ministry called the U.S. actions "completely unacceptable", adding that Beijing will have to respond to the latest moves by Washington.Most people think world is more dangerous than two years agoGlobal stocks were under pressure overnight, with Chinese markets taking the biggest hit. The Shanghai Composite index dropped 1.8 percent, while China's blue-chip CSI300 index declined 1.7 percent.U.S. officials on Tuesday issued a list of thousands of Chinese imports that the Trump administration wants to target with new tariffs, including hundreds of food products, as well as tobacco, chemicals, coal, steel and aluminum.There is a two-month period of public comment on the latest proposed list before the tariffs get imposed. President Donald Trump has said he may ultimately target more than $500 billion worth of Chinese goods - roughly the total amount of U.S. imports from China last year.India cuts Iranian oil imports in June ahead of US sanctionsAmong premarket decliners, Boeing and Caterpillar fell around 1.5 percent each and U.S. Steel 2 percent.Intel, Broadcom, Micron Technology, AMD and Nvidia were down between 1.3 percent and 3.7 percent.Industrial and metal companies, as well as chipmakers have been the worst hit since Trump first threatened tariffs in early March as they are largely reliant on China for businesses.Ethiopia says re-opening roads to Eritrea's Red Sea ports a priorityAt 7:09 a.m. ET, Dow e-minis were down 198 points, or 0.79 percent. S&P 500 e-minis were down 18.25 points, or 0.65 percent and Nasdaq 100 e-minis were down 55.25 points, or 0.76 percent.Facebook, Amazon, Apple, Netflix and Alphabet were all down about 1 percent.U.S.-listed shares of Chinese companies also tumbled, with e-commerce giant Alibaba falling 1.7 percent, and JD.com and Baidu down 1.8 percent each.However, TripAdvisor's shares rose 1.9 percent after Barclays upgraded the stock to "overweight" rating.
Futures drop after US threatens more China tariffs
China is clearly angry about Washington's hard line on trade, but has controlled coverage of the row in its media, limiting open commentary and banning attacks on U.S. President Donald Trump, several sources with knowledge of the matter said.Beijing has issued unusually strict rules limiting coverage of the trade war because of worries that unrestrained reporting could spark instability or roil its already jittery financial markets, according to sources within Chinese state media."When exposing and criticising American words and actions, be careful not to link it to Trump and instead to aim it at the U.S. government," said a memo based on a set of directives issued verbally by government officials that was circulated to reporters at a state-run news outlet and seen by Reuters.China says will hit back after US proposes fresh tariffs on $200 bln in goodsMedia outlets must help "stabilise the economy, growth, employment, stabilise foreign trade, investment, finance, stabilise the stock market, the foreign exchange market, the housing market, and basically stabilise the peoples' thinking, hearts and expectations", it said.A person who works at a leading Chinese news website said the rules issued last week were "the most strict yet".The website was told to post only stories about the trade conflict by state news agency Xinhua, rather than publishing its own. It was also ordered to keep the topic out of the top few headlines and closely manage comments about it, according to the source.US readies $200 billion in additional Chinese tariffsThe website's smartphone app was no longer permitted to send push notifications on the subject to users, and the website was forbidden from setting up special pages about the dispute.Like other Chinese media workers who spoke with Reuters for this story, the source declined to be identified by name due to the sensitivity of the topic and because he was not authorised to speak publicly about it.Editors at several leading state-media outlets, including the China Daily, the Global Times and Xinhua, were not made available after Reuters requested interviews. The information office of the State Council, or cabinet, did not immediately comment on the state's efforts to censor news of the trade row.It was not immediately known if Beijing's attitude would change after the United States threatened further import duties on Chinese goods on Tuesday in a sharp escalation of the conflict between the world's two biggest economies.To be sure, there have been vitriolic editorials in key Chinese newspapers as the trade tensions have simmered.In recent weeks, state media have criticised U.S. behaviour as reckless, hegemonic, delusional, and accused the Trump administration of harbouring "blood lust" and behaving like a "gang of hoodlums".REVEALING CARDSBut the attacks have been general - there has been little mention of Trump, for instance - and few details on how China will be affected.Two sources at separate state-run news organisations said they had been instructed not to mention the impact of the trade war on Chinese companies in their coverage.At one large state news organisation, a fourth source said journalists had been instructed to report on Chinese company news with caution because some were already feeling the effects of the trade spat.Reporters at the news outlet, a key government mouthpiece, were directed not to stir up negative emotions or "reveal the cards" of Chinese importers, the source said.In disputes with South Korea and Japan in recent years, Beijing has taken a more aggressive stance and at times encouraged public anger.In 2012, state media tacitly supported anti-Japan protests during a spat over disputed islands, and last year the Communist Youth League helped target South Korean brands on social media amid a row over Seoul's decision to allow the United States to install an advanced missile defence system on the Korean peninsula.But the power imbalance in the China-U.S. trade dispute and the potential for real economic discomfort have led the control-obsessed leadership to adopt a softer approach, analysts said."They know the seriousness of the situation and the possible consequences, and they don't want the media coverage to bring any kind of extra damage," said Li Xigen, a professor in the department of Media and Communications at City University of Hong Kong."Later, as the situation gets worse, if the people are actually affected with their jobs, with prices ... that may become real anger, and if the media do anything to stir up that kind of anger it will cause some kind of very bad consequences."The trade war does not appear to be a hot item on China's tightly-controlled social media. Media sources said authorities were censoring anything found objectionable, minimising the prospect that any outcry on social media platforms could spur a backlash against U.S. brands.Wang Jiangyu, a trade expert at the National University of Singapore, said attacking U.S. firms could backfire."China might need to restrict the market access of American companies. But to purge American companies that are already operating in China might be a very bad idea. Those companies generate jobs and revenue for China. Most Apple products are made in China," he said."To do something to harm American firms that are already operating in China would be very stupid."
Keep calm, don't inflame trade row with US: China to its state media
The survey, conducted between April 10 and May 10, reflects the mix of key concerns and realities for American businesses in China at a time of heightened uncertainty as the Trump administration raises the ante in its trade war with Beijing.
U.S. President Donald Trump has accused China of unfair trade practices that give its firms an advantage, while hobbling American companies and creating an outsized trade deficit for the United States.
On Tuesday, the office of the U.S. Trade Representative said it would impose 10 percent tariffs on an extra $200 billion worth of Chinese imports, from food products to tobacco, chemicals, coal, steel and aluminum.
The U.S. on Tuesday announced it is readying 10 percent tariffs on an additional $200 billion worth of Chinese goods as Washington and Beijing escalate their growing trade war.U.S. Trade Representative Robert Lighthizer released the list of wide-ranging goods that could be penalized following a public hearing and comment period. The Chinese goods include meat, ornamental fresh and saltwater fish, a host of seafood including eel and bigeye tuna, burglar and fire alarms, fruits and vegetables, baseball gloves and rubber-based products.Last Friday, the U.S. imposed 25 percent tariffs on $34 billion worth of Chinese goods to which China quickly retaliated with an equivalent amount of penalties on American goods.Lighthizer called China's retaliatory levies "without any international legal basis or justification", stressing Washington took action to correct China's "abusive trading practices with regard to intellectual property and innovation"."China has been engaging in industrial policy which has resulted in the transfer and theft of intellectual property and technology to the detriment of our economy and the future of our workers and businesses," he said in a statement.President Donald Trump threatened China with escalating economic penalties last month if Beijing does not acquiesce to his demand to narrow the U.S.-China trade imbalance and halt other "unfair practices", threatening the additional $200 billion in tariffs announced Tuesday if China did not change course and change its trade practices.The latest wave of tariffs will reportedly go into effect sometime after the end of August.Lawmakers have increasingly voiced concern over Trump's protectionist economic policies, and Tuesday's actions drew quick concern on Capitol Hill.Republican Senate Finance Committee Chairman Orrin Hatch said the announcement "appears reckless and is not a targeted approach"."We cannot turn a blind eye to China’s mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy," he said in a statement.
US readies $200 billion in additional Chinese tariffs
The survey showed that while U.S. companies continue to face challenges in China, 34 percent of respondents felt Chinese government policies toward foreign companies had improved, up from 28 percent last year.
The number of companies that felt policies had worsened for foreign firms fell to 23 percent from 33 percent, although 60 percent of respondents felt China's regulatory environment lacked transparency, on par with last year.
Insufficient intellectual property rights protection and the need to get licences were the top two regulatory challenges, although slightly fewer companies found both to be a hindrance in the 2018 poll, compared with that of 2017.
To force greater market access, 42 percent of respondents favoured investment reciprocity, up from 40 percent last year. But the number opposing it also grew, to 16 percent, from 9 percent last year. The number of those unsure fell to 31 percent from 44 percent.
"Despite the relative optimism our members feel guarded about the future," AmCham said in its statement.
Concerns such as government favouritism for domestic firms and pressure on U.S. ones in strategically important sectors to transfer technology were "stoking demand for reciprocity in the U.S.-China trading relationship, even if our members generally oppose the use of retaliatory trade tariffs," it added.
The biggest operational challenge of all was rising costs, an issue confronting more than 95 percent of respondents, the poll showed. More than 85 percent of respondents saw domestic competition as a challenge.
The proportion of companies expecting to be profitable was basically flat, at about 77 percent, but firms signalled they were pulling back slightly on investment.
The survey showed 53 percent of companies increased investment in 2017, down from 55 percent the year before, highlighting a trend of reduced investment growth since a 2012 peak, when 74 percent of respondents said they had boosted investment in China.