Feb 28, 2019

Executives support the China trade war, but not its consequences

A worker inspects wheel hubs at a factory in the Jiangsu Province of China. Photo: VCG/VCG via Getty Images

Businesses are not abandoning China in droves as a result of President Trump's trade war. But business leaders are annoyed and making changes.

By the numbers: In a recent Bain & Co. survey of more than 200 senior executives at U.S. multinational companies with operations in China, 60% of respondents executives largely support tariffs on China — while 60% also said they expect their business to face cost headwinds due to the U.S. tariffs on Chinese goods.

The big picture: Few of the executives think China's retaliatory tariffs are "fair" and most don't like the tariffs' results.

  • More than 65% of electronics and industrial manufacturers believe they will see negative impacts.
  • Only 40% of respondents believed that the tariffs would ultimately lead to more U.S. jobs.

In the next 12 months, more than 40% of the executives said their companies planned to take actions like finding new sourcing partners and new regions to source raw materials.

  • 39% said they will look to renegotiate supplier contracts.
  • 33% said they planned to pass costs on to customers.

Go deeper: Trump delays tariff hike after "substantial progress" with China

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