China Inc.’s Already Low Profit Margins at Risk From US Tariffs

Chinese firms are mostly less profitable than comparable US companies, leaving exporters at risk of a further hit to earnings as President Donald Trump’s tariffs sap demand, according to new research from Bloomberg Economics.

While Chinese companies can defend their “razor-thin margins by leveraging their market dominance” in the short term, at some point US customers will have to raise prices in response, wrote Bloomberg’s China economists Chang Shu and David Qu.

Read more: Who Loses the Most on Trump’s Tariffs? Who Wins?: QuickTake

“Tariffs will eventually pass through to consumers, weighing on demand — a pattern seen ...