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The Star
17-05-2025
- Business
- The Star
Trump tariffs seen lowering Chinese firms' US investment plans
A China General Chamber of Commerce – USA survey released Monday showed half of Chinese companies operating in the United States plan to shift emphasis away from investments in the country in light of Trump administration tariff policies. The business group conducted the survey of almost 100 Chinese enterprises operating in the US in March and April, finishing shortly before US President Donald Trump's so-called 'reciprocal' tariffs on Chinese products of 145 per cent and Beijing's retaliatory 125 per cent tariffs. After weekend talks in Switzerland, both sides agreed Monday to lower tariffs for 90 days, with US tariffs reduced to 30 per cent and Chinese tariffs to 10 per cent. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Respondents to the CGCC survey included companies in 11 sectors, including consumer goods and services, energy, industrial firms, real estate, and communication services, with financial companies taking the largest share. Among the companies saying they plan to reduce their investment in the US market, 22 per cent said they would 'significantly decrease' their focus on US investments and plan to suspend or withdraw most investments. Another 28 per cent indicated a 'slight decrease' in priority and said they would consider scaling back some investments because of current administration policies. In contrast, 22 per cent of respondents said they would increase their US investment and 28 per cent said they would maintain investment. The results revealed widespread pessimism about future investment in the US under the second Trump administration, contrasting with findings showing that Chinese companies' assessment of the US business environment improved notably during the final year of former president Joe Biden's term. As the survey concluded before Trump announced his new levies on April 2, it added that the tariffs and related policies may have 'further deepened business pessimism – beyond what is reflected in this survey'. In another survey question, none of the respondents said they think Trump's policy will have 'significant' promotion or limiting effect on their US market expansion, but 50 per cent said it will have 'moderate hindering effect', compared with 17 per cent saying they expect a 'moderate promoting effect'. The companies identified a wide range of expected challenges to their US operations this year and next, with 90 per cent citing the stalemate in bilateral political and cultural relations, 73 per cent pointing to frictions in economic and trade ties, and 60 per cent flagging restrictive US foreign investment policies. US domestic issues also ranked high among Chinese investors' concerns. According to the survey, 80 per cent of respondents cited inflation and economic instability as major risks. Other frequently mentioned challenges included high compliance and litigation costs, as well as exchange rate volatility. The chamber urged Chinese firms to adopt flexible strategies incorporating steps to deal with risks, including 'core and backup' investment portfolios prioritising 'business-friendly' regions. The chamber said investors should 'decentralise' research and development, strengthen collaboration with US companies and improve compliance in the face of hi-tech restrictions. To hedge geopolitical headwinds in particular, it suggested the companies develop local talent recruitment and work with industry alliances to strengthen their voices. 'Ongoing tariffs and tightening export controls on technology have significantly increased business costs and market pressures. Although the US economy has shown signs of stabilisation, high interest rates, persistent inflation, and labour shortages continue to pose serious uncertainties,' Hu Wei, the chamber's chairman and president and CEO of Bank of China USA, said in the survey. 'In this context,' he said, 'adapting to a shifting policy and economic environment has become a critical priority for Chinese enterprises in the US.' Chinese direct investment in the US has dropped significantly since Trump's first administration, and the trend continued in Biden's term amid growing US restrictions on Chinese investment, especially in the hi-tech sector. That investment was US$28 billion in 2023, down 6.2 per cent from 2022, according to the latest US official data, led by manufacturing, real estate, and banks and similar institutions. Several former US trade representatives Monday underscored the uncertainty plaguing US-China trade relationship despite this weekend's thaw. 'I don't pay all that much attention to what the particular tariff rate is ... it'll change 10,000 times between now and 90 days from now,' Charlene Barshefsky, former US president Bill Clinton's trade representative, told an event at the Centre for Strategic and International Studies. Barshefsky, who helped negotiate China's entry into the World Trade Organization, added that it was 'good' that both sides, particularly the US, had 'climbed down from the ledge' and recognised the need to get back to 'managing' rather than 'transforming' the bilateral relationship. Carla Hills, former President George H.W. Bush's top trade envoy, called the 90-day tariff reduction a 'very small step forward' towards easing uncertainty, saying it does not provide the longer-term assurance that companies need. 'There may be some purchases to quickly get ahead of a problem,' she said, but US markets and business still do not know, 'in an overall way, what the rules are going to be in our own country'. More from South China Morning Post: For the latest news from the South China Morning Post download our mobile app. Copyright 2025.
Yahoo
15-05-2025
- Business
- Yahoo
China General Chamber of Commerce - USA Launches Its 12th Consecutive Annual Business Survey Report on Chinese Enterprises in the U.S.
NEW YORK, May 15, 2025 /PRNewswire/ -- On May 12th, 2025, the China General Chamber of Commerce – USA (CGCC) releases its Annual Business Survey Report on Chinese Enterprises in the U.S. in Washington, D.C. Featuring the theme "Change Management Strategies in A New Era," this year's report draws on survey responses and in-depth interviews with nearly 100 Chinese companies operating in the U.S. It examines how Chinese enterprises are adapting their management practices amid rapid technological changes and growing uncertainties in the business environment. The report finds that Chinese companies in the U.S. have demonstrated adaptability and resilience in navigating a global economic landscape. While perceptions of the U.S. investment climate have slightly eased, investment strategies remain divergent. Revenues have stabilized, and profitability has slightly improved, although overall margins remain modest, and brand development continues to lag. In areas such as digital transformation, supply chain resilience, and geopolitical response, companies are prioritizing long-term planning but proceeding cautiously due to ongoing external uncertainties. Based on the findings, CGCC offers the following recommendations for Chinese enterprises operating in the U.S.: Monitor macroeconomic trends and policy developments to adjust business strategies, strengthen cost control, risk management, and regulatory compliance, while improving local public relations efforts and brand positioning. Advance digital transformation with strategies aligned to market needs, leveraging hybrid cloud and modular architectures to balance cost and efficiency, promoting organizational restructuring, employee upskilling, and compliance automation. Build more resilient and collaborative supply chains by enhancing risk awareness, optimizing production and inventory systems, fostering ecosystem partnerships, and developing professional talent to support long-term resilience. Respond proactively to geopolitical uncertainties by assessing policy adaptability, refining investment and talent strategies, strengthening cooperation with local partners, and amplifying voices through industry alliances. CGCC remains committed to representing and connecting the U.S.-China business communities by providing timely insights and resources through its research and engagement HERE to access the report in English View original content to download multimedia: SOURCE China General Chamber of Commerce - USA Sign in to access your portfolio
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Business Standard
13-05-2025
- Business
- Business Standard
Trump tariffs prompt Chinese firms to cut back US investment plans
A survey by the China General Chamber of Commerce – USA (CGCC) revealed that 50 per cent of Chinese companies operating in the US intend to reduce their investment focus in the country due to the Trump administration's tariff policies, The South China Morning Post reported on Tuesday. The CGCC survey included companies from 11 industries, such as consumer goods and services, energy, industrial firms, real estate, and communication services, with financial companies representing the largest portion of respondents. CGCC is a US-based organisation focused on the American and Chinese business communities. It surveyed nearly 100 Chinese businesses operating in the US during March and April, concluding just before President Donald Trump imposed 145 per cent reciprocal tariffs on Chinese goods, and China responded with 125 per cent retaliatory tariffs. Following weekend negotiations in Switzerland, both nations agreed on Monday to temporarily lower tariffs for 90 days, with US tariffs decreasing to 30 per cent and Chinese tariffs to 10 per cent. Of the companies planning to decrease US investment, 22 per cent indicated they would 'significantly decrease' their US investment focus and intend to suspend or withdraw most investments, while 28 per cent reported a "slight decrease" in priority and said they would consider reducing some investments due to current administration policies. In another survey question, none of the respondents believed Trump's policy would have a 'significant' positive or limiting impact on their US market expansion. However, 50 per cent anticipated a 'moderate hindering effect", while 17 per cent expected a 'moderate promoting effect". US trade deficit swells to record high The US trade deficit surged to a record high in March as businesses accelerated imports ahead of impending tariffs, contributing to the first quarterly GDP decline in three years. According to the Commerce Department's Bureau of Economic Analysis (BEA), the trade gap rose by 14 per cent to a record $140.5 billion, up from a revised $123.2 billion in February. President Donald Trump's broad tariff measures -- including raising duties on Chinese imports to 145 per cent -- prompted a rush to import goods to avoid higher costs. Although reciprocal tariffs with most US trade partners were paused for 90 days, duties on Chinese products began in early April, sparking a trade war with Beijing. US President Donald Trump lauded a 'total reset' in relations between China and the US after the two sides jointly declared a 90-day pause on a portion of their existing tariffs. 'The biggest thing to me is the opening up (of China),' Trump stated. "I think it would be fantastic for our businesses if we could go in and compete.' In a media address, US Treasury Secretary Scott Bessent underlined that 'both sides showed great respect' during the negotiations.
