SHANGHAI (Reuters) – Most U.S. businesses operating in China oppose using tariffs as a weapon to solve their problems covering anything from market the means to access poor protection of ip rights, market research suggested on Thursday.

Nearly 69 percent of the 434 respondents towards the annual China Business Climate Survey with the American Chamber of Commerce in Shanghai opposed tariffs, while 8.Five percent backed them.

The survey, conducted April 10 to May 10, reflects the combination of concerns and realities for American businesses in China at this time of heightened uncertainty because the Trump administration raises the ante in its trade war with Beijing.

President Donald Trump accuses China of unfair trade practices that benefit its firms while hobbling U.S. companies and creating an outsized trade deficit for that Us.

Washington raised the stakes in their trade war with China , proposing 10 percent tariffs when using extra $200 billion price of Chinese imports, from foodstuffs to tobacco, chemicals, coal, steel and aluminum.

“One should provide Trump administration credit to get China’s attention because for many years you can find extended discussions about market access issues that plague foreign companies in China, as well as progress is pretty slow,” said Ken Jarrett, president of AmCham in Shanghai.

However, extrapolating with the survey findings, Jarrett said multilateral negotiations were a preferable approach.

“Now which the U.S. government has China’s attention I think actually there isn’t any alternative but to resume the negotiating table,” said the first kind U.S. Consul General in Shanghai.

While U.S. firms still face challenges in China, 34 percent of respondents felt state policies toward foreign firms had improved, up from 28 percent recently, laptop computer showed.

Those that felt policies had worsened for foreign firms fell to 23 percent from 33 percent in 2009. Sixty percent said the regulatory environment lacked transparency, on par with 2019.

Protection of intellectual property rights and licensing requirements were the top two regulatory challenges.

The Trump administration has complained that U.S. information mill instructed to give over key technology to view China’s market.

Twenty-one percent of firms during the survey said they believed pressure to transfer technology, with aerospace and chemicals firms in the lead at 44 percent and 41 percent respectively.

China’s Cybersecurity Law, which took effect last year, had disrupted businesses, the survey said, while VPN policies made continue to work harder for 56 percent of companies.

GUARDED OUTLOOK

While tariffs had not been popular, 42 percent of respondents favored investment reciprocity in an effort to push for difference in market access, up from 40 % not too long ago.

However, those in opposition to reciprocity grew to 16 percent from 9 percent last year, as well as wide variety of unsure respondents slipped to 31 percent from 44 percent.

“Despite the relative optimism our members feel guarded concerning the future,” AmCham said.

Concern about preferential answer to Chinese firms and pressure for U.S. technology transfers is “stoking demand for reciprocity inside U.S.-China trading relationship, although our members generally oppose the application of retaliatory trade tariffs”.

The biggest operational challenge was rising costs, a worry cited by 95 % of respondents. In excess of 85 % said domestic competition would have been a challenge.

The proportion of companies expecting to be profitable in China was basically flat at about 77 percent, the survey showed, but firms also signaled modest pullback in investment.

Fifty-three percent of firms increased purchase of 2019, down from 55 percent the prior year, highlighting a trend of reduced investment growth since a 2012 peak, when 74 percent of respondents said that they had boosted investment in China.