With the inauguration of Donald Trump just a few days away, U.S. companies have warned the incoming President against starting a trade war with China. They said that China will be prepared to retaliate if Trump were to implement excessive U.S. import tariffs.
According to the annual survey of members of the American Chamber of Commerce in China, the percentage of companies that rate China among their top three investment targets fell to 56 percent--the lowest in eight years.
It also showed that four out of five companies felt less welcome in China than before--almost double compared to the figure in 2014.
Meanwhile, one in four companies is considering shifting to other countries because of concerns about the regulatory environment, higher costs and other reasons.
"China has threatened to and is preparing to take steps in retaliation if such actions take place," said Lester Ross, a board member of the American Chamber of Commerce.
Just recently, China ordered unusually high anti-dumping penalties against a U.S.-made agricultural chemical. Such move might be taken as a warning to the incoming administration at The White House.
But U.S. companies are going to do whatever they can to prevent the trade war. William Zarit, who chairs the American Chamber of Commerce, plans to send a group of business people to meet lawmakers and Trump administration officials next month.
"We certainly are not going to lecture the administration, but will share our ideas on a win-win path forward," he said. Zarit added that he and the rest of the Chamber don't see that a trade war would benefit anyone.
It seems that the Chamber's sentiments reflect what is everyone's mind on China and Trump right now--worried over a possible trade war between two of the most powerful economies in the world which will affect the most of us.