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WASHINGTON (Reuters) - U.S. companies doing business in China remain profitable, but 81% say escalating trade tensions between the world’s two largest economies have affected their business operations, a new survey released Thursday by the US-China Business Council found.

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FILE PHOTO: Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019. REUTERS/Aly Song

That marks an eight percentage-point increase from 2018, said the group, which represents more than 220 U.S. companies ranging from Boeing Co (BA.N) to Archer Daniels Midland (ADM.N) and Hewlett Packard (HPE.N).

The next round of U.S. and Chinese tariffs will take effect on Sunday in a trade war that has roiled financial markets and threatens to push the global economy into recession.

Nearly half the U.S. companies surveyed reported having lost sales and market share, mainly as a result of tariffs imposed by both the United States and China, and many cited concerns about their ability to compete given advantages offered to domestic firms.

U.S. companies say they are also losing sales because their Chinese customers increasingly view U.S. companies as unreliable business partners given the volatility of the bilateral commercial relationship, the survey showed.

Nearly 40% of those surveyed said they lost sales because of Chinese partners’ concerns about doing business with U.S. companies, a seven-fold increase over 2018.

The survey showed that China remained among the top five global markets for U.S. companies because of its comparative size, and 97% of member companies reported increased profitability in China in 2019 despite the trade dispute.

A slight majority of the companies expect an increase in revenue in 2020, a drop of 26% from the previous year, reflecting uncertainty

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