SINGAPORE — Most business leaders believe the ongoing trade war between the United States and China will either intensify or remain as it is today, and almost half say the tensions have had a negative impact on their business in the last six months, a survey has found.

The survey, conducted by the American Chamber of Commerce in Singapore (AmCham Singapore), polled 144 businesses about their sentiments on the trade war.

NO REPRIEVE SOON

The survey found that business leaders were not optimistic that the trade tensions will end anytime soon:

• 40 per cent said the trade war will deteriorate further

• 30 per cent said it will stay the same indefinitely

• 30 per cent said it would be resolved soon

At a panel discussion on Wednesday (June 26) to talk about the survey results, experts said the pessimism likely stems from the fact that the trade war has recently intensified to become a war about technology and national security.

China’s Huawei was placed on a US export blacklist last month, amid concerns in Washington that the telecommunications giant could use its devices to spy on Americans for China.

AmCham chairman Mr Dwight Hutchins said the trade war “has metastasized into a tech war with a lot more (at stake) today”.

The founder and executive director of the Asian Trade Centre, Dr Deborah Elms, agreed.

“This (trade war) is not new. But the extent to which the US-China trade war and tech war has become part of a national security argument is striking. And this makes it even harder to resolve.”

HOW BUSINESS SENTIMENT IS AFFECTED

Not surprisingly, the trade war has most respondents concerned:

• 81 per cent said that they were concerned about the trade war

• 11 per cent said they were not concerned about the trade war

• The remaining 8 per cent were unsure

Nonetheless, most were still positive about the overall business outlook over the next six months:

• 48 per cent said they had a positive outlook

• 39 per cent said they were neutral or unsure

• 13 per cent said their outlook was negative

The expert vice president of Bain & Company in Singapore Mr Gerry Mattios said that it is because companies have “matured” from a year ago.

He said: “They are taking a far more long term view of how this is going to play out — whether this is going to go on for a few months or maybe a few years. Going back to 2018, I remember that many companies were actually reacting in a very abrupt way on the news of the tariffs.”

Mr Frank T. Troise, the chief executive officer of SoHo Capital, a private investment company with a Singapore office, added that those who were optimistic are likely in a position to reallocate their supply chains in the region.

POTENTIAL FOR SOUTH-EAST ASIA

One winner out of the trade war — South-east Asia.

When asked whether the trade war made South-east Asia a more attractive to do business:

• 12 per cent said it was dramatically more attractive

• 36 per cent said it was marginally more attractive

• 40 per cent said it was just as attractive as before

• 7 per cent said it was less attractive

Mr Troise said the trade war is an “enormous opportunity” for the region.

Using Vietnam as an example, he told TODAY: “They’re exhibiting the same economic growth curve that Singapore did, where it is moving from basic, simple manufacturing to become more complex.”

This means that Vietnam is increasingly becoming a viable alternative to China for higher-value manufacturing activities, and more companies can shift their operations there if they want to move out of China amid the trade war, he said.

Still, he added that there are political sensitivities that South-east Asian countries have to be aware of even as they attract more investments.

“If you are Vietnam, how vocal do you want to be? Do you want to talk about how successful you are by taking business away from China? We’re not hearing it overtly but the reality is, that’s what’s occurring.”