China may be disrupting US companies because of Trump's tariff threats

  • The US and China are locked in a growing trade battle.
  • According to a new Washington Post report, US companies are already seeing delays and increased scrutiny in China, possibly because of the trade fight.
  • The US and China are set to impose tariffs on $US34 billion worth of goods from the other country on Friday.

The trade battle between the US and China is set to formally kick off Friday, when the US is set to impose tariffs on Chinese goods. And it appears some US companies are already dealing with the fallout.

The Washington Post’s Danielle Paquette reported on Wednesday that some of the “qualitative measures” China promised in response to President Donald Trump’s tariff threats may already be in effect.

US companies shipping goods to China are facing more inspections and delays in the country, according to The Post. One company said random border inspections had increased by 98% over the past month, and an agriculture company said a shipment of cherries spoiled and had to be returned after Chinese officials forced the goods into quarantine.

While those particular instances may not be directly related to the tariffs, groups in China, such as the American Chamber of Commerce in the People’s Republic of China, told The Post that members were concerned about the possibility of regulatory retribution on US firms due to Trump’s trade fight.

David Lubin, the chief emerging-market economist at Citi, wrote following a recent trip to China that options for retaliation being discussed in the country included “a go-slow by China on licence approvals for US firms” and “enhanced product inspections.”

There have also been concrete examples of the trade fight’s fallout. For instance, China is expected to cancel orders for about 1.1 million metric tons of US soybeans. Soybeans are the US’s largest agricultural export to China, with $US14.2 billion worth of the crop going to China in 2016.

Looming over the disruption is the impending imposition of the first wave of tit-for-tat tariffs, expected to go into effect Friday. The US and China are set to hit roughly $US34 billion worth of goods from the other country in the biggest blow so far in the growing trade war.

The snags also come as US companies face trade-related troubles at home. Firms are considering layoffs and shifting operations outside the US to handle the impact of Trump’s various tariffs.

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