China has its own measures of pressure on US firms

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China has its own measures of pressure on US firms

June 20, 2018 - 14:08
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China does not import enough American goods to impose equal tariffs to US export to China, however it still can put pressure on a whole range of US companies, Bloomberg reports. Such companies as Apple, Walmart, Boeing, General Motors, are working in China today and desperate to expand inside the country.

Tiananmen Square, Beijing, China | © Tangting, CC0 1.0

China does not import enough American goods to impose equal tariffs to US export to China, however it still can put pressure on a whole range of US companies, Bloomberg reports.

Such companies as Apple, Walmart, Boeing, General Motors, are working in China today and desperate to expand inside the country. Such measures as customs delays, tax checks and additional regulatory requirements that China can implement if the US imposes import tariffs can prevent American companies from reaching their goals.

Total export volume of US products to China reached just $130 billion. It means that imposing import tariffs to $250 billion of Chinese imports will not cause similar measures on behalf of China. However, if to evaluate sales of US firms in China along with import, then US will have surplus of $20 billion, according to Deutsche Bank AG estimates.

Putting pressure on foreign companies through bureaucratic methods is a common practice for China. South Korean and Japanese companies already felt this pressure during conflicts between states. American firms were complaining about difficulties in doing business in China even before threat of tariffs.

Today American companies have $627 billion assets in China, while sales in 2015 reached $482 billion, For comparison, Chinese firms have just $167 billion in US assets.

Auto producers are under biggest threat. For example, almost quarter of GM’s profits last year was made in China.