The escalating US-China trade tensions is already having an impact on European businesses in China. An official with the European Union Chamber of Commerce in China, said that this despite the fact that it is not until next week that the first shot of an all-out trade war would be fired.
Expecting that there would be a fall in trade flows because of the escalating trade confrontation between the US and China, a China-US shipping route has been decided to be closed down by a large Top of FormEuropean logistics firm, said
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George Lau, a vice-president of the chamber, which represents the interests of EU companies operating in China.
“They don’t know what to do,” Lau, board chairman of the South China chapter, said of the European company.
Lau did not name the company but said that the firm is still being patient to watch the developing trade dispute and its impact on shipments.
The Trump administration has announced the imposition of 25 per cent tariff on Chinese goods imported into the country worth $34 billion worth and it is set to come into force from July 6.
In response to those proposed tariffs, threat of imposing equivalent tariffs on the same amount of American products was issued by China. on this threat, US President Donald Trump has again threatened to impose a 10 per cent tariff on another set of Chinese goods worth $200 billion in case Beijing imposes the tariff.
Business sentiment is being dampened by a looming trade war which has also had an impact on his own company said Lau while speaking on the sidelines of an event Friday. He owns a company\y called TÜV Rheinland which is a technology service provider.
“When you are a part of the Chinese market, you can’t avoid that,” he said. “The larger a company is, the deeper it may get hurt.”
European companies were being forced to postpone investment decisions because of the trade battle, said Chamber president Mats Harborn. Such postponement “might trigger the ending of the boom period of the present business cycle”.
In order to counter what it calls the “protectionism and isolationism” of Trump’s America, the Chinese government has been appealing to the multinational companies for support.
If there is a trade war, China would still remain open for business, promised Chinese President Xi Jinping, in a meeting with executives from American and European multinational companies in Beijing last week. he also said that the Chinese government would take up measures to open up its economy further for foreign companies.
(Adapted from SCMP.com)