US multinationals are bracing up for what is shaping up to be an all-out trade war between their country and China. Within weeks, the US may impose tariffs on more than half of all Chinese exports to the US. In response China is contemplating hitting back at more than 80 per cent of US exports to China.

Tariff increases are not just a tax on consumers but also bring uncertainty to the supply chain for brands. Top brands depend a lot on a stable global supply chain. Around 1,000 types of Chinese products in the textile and apparel category are subject to tariffs imposed by the US.

But as much as US companies operating in China hate the idea of tariffs, many of them feel the threat of tariffs can be useful. The US and Chinese trade negotiators have finally begun to talk about critical issues that had been ignored for years, such as China’s industrial policies and mandatory joint venture structures that facilitate technology transfer to Chinese companies.

Multinational corporations have been growing ever more frustrated with the many hurdles they face in China, from market access restrictions to an opaque regulatory environment. Some of these issues have been repeated year after year — some of them have been issues for 30 years.