China forex regulator surveying Shanghai firms about potential impact of higher U.S. tariffs: sources

A woman leaves the building of State Administration of Foreign Exchange (SAFE) in Beijing, China, January 11, 2017. REUTERS/Jason Lee

SHANGHAI (Reuters) - China’s foreign exchange regulator began surveying firms in Shanghai in early February about the impact on cross-border trade of possible protectionist measures by the United States, two sources said on Tuesday.

The State Administration of Foreign Exchange (SAFE) is asking firms with large trading operations and cross-border payments with the United States whether they have U.S. production facilities, their tolerance for higher tariffs, and how they would deal with the higher tariffs, said one of the sources.

U.S. President Donald Trump has repeatedly threatened to slap higher tariffs on Chinese imports in retaliation for what he claims are unfair trade practices, though he has yet to follow through on the threats since taking office on Jan. 20.

“It is still in the survey phase. Every foreign trade firm’s situation is different. If there really was a trade war, there will be pressure,” said the above source.

Reuters was not immediately able to reach SAFE’s Shanghai office for comment.

SAFE is also looking at the operations of U.S.-invested firms in China, including their business models and whether those firms will move production to other countries or divest from China.

Reporting by Shanghai and Beijing newsrooms; Editing by Kim Coghill