China Economy Under Threat from Potential Trade Tariffs and US-China Relations
China Economy and Executive Concerns over US-China Relations
As the potential for higher tariffs looms, the China economy is facing a strategic shift. According to a UBS survey, corporate executives are considering closing factories in China due to fears of an escalated US-China trade war should Donald Trump reclaim the presidency.
Survey Insights on Tariff Impacts
More than 90% of CFOs polled anticipate additional tariffs if Trump is re-elected, with many planning to relocate supply chains or expand into alternate markets. The manufacturing exporters expect tariffs to remain below 60%, but they are bracing for profound impacts on their operations.
- 33% may close factories or exit China if tariff hikes occur.
- Companies have already positioned 40% of their production overseas.
- Key countries for relocation include Japan, South Korea, and ASEAN member states.
Future of the China Economy
Domestic prospects seem grim, with executives predicting declines in orders and profit margins for 2025. Analysts warn that capital expenditures may be under threat from a resurgence of tariffs. A recovery in export orders is anticipated, yet it remains vulnerable to potential US trade policies.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.