BEIJING (AP) — An alarming trend has emerged among U.S. companies operating in China as they brace for significant sales declines this year due to tariffs imposed by U.S. President Donald Trump, as well as retaliatory measures from China. This information comes from a recent survey conducted by the American Chamber of Commerce in Shanghai, released on Wednesday.

Survey Insights

Out of the 254 companies surveyed, nearly two-thirds indicated that the newly implemented tariffs have negatively impacted their projected revenues for operations within China for the year 2025. Interestingly, one-third of respondents, particularly in sectors such as banking—where there is minimal dependency on U.S. imports or exports—do not foresee any adverse effects.

Understanding the Tariffs

President Trump has set a substantial 30% tax on various imports from China. This follows a significant escalation where some tariffs reached as high as 145% before the two nations attempted to alleviate tensions through a negotiation in May. In retaliation, China has placed a 10% tax on imports from the United States, further complicating trade dynamics.

Industries Most Affected

According to leaders at the Shanghai chamber, the tariffs primarily impact companies that export goods to the U.S. or import American components crucial for production in China. Eric Zheng, the president of the American Chamber of Commerce in Shanghai, stated, “Tariffs have had a huge impact on our operations.”

Ongoing Trade Talks and Uncertainty

As trade discussions between the two countries continue, the future direction concerning tariffs remains ambiguous. This ongoing uncertainty presents a significant hurdle for businesses attempting to strategize for the future, as highlighted by Zheng.

Legal Challenges

American judicial systems have ruled that many of Trump’s tariffs constitute an illegal application of U.S. emergency powers. Nevertheless, these import taxes remain effective as the administration appeals the decision to the Supreme Court.

The Manufacturing Sector’s Dilemma

The survey reveals that manufacturers are particularly vulnerable, with nearly 75% acknowledging that the import taxes would adversely affect their projected revenues in China for 2025. The ongoing U.S.-China tensions have thus been identified as the leading challenge facing these companies for the next three to five years.

Call for Improved Relations

In light of the challenges outlined in the survey, Zheng has emphasized that enhancing the bilateral relationship between the U.S. and China is paramount, calling it “our No. 1 ask.”