Trump Faces Corporate Pushback As 122 American Companies In China Demand Tariff Relief Amid Revenue Volatility
News Summary
Nearly half of U.S. companies operating in China (122, or 48%) are urging President Trump to eliminate all tariffs and non-tariff barriers on Chinese goods, according to a new survey by the American Chamber of Commerce in Shanghai. The survey highlights that trade volatility has created immense uncertainty for foreign companies in China, with Chinese shipments to the U.S. falling 33.1% year-over-year and U.S. imports to China dropping 16%. Despite 71% of surveyed members reporting profitability in 2024, up from 66% in 2023, only 45% expect revenue increases in 2025, marking a record low. Furthermore, just 30% anticipate China outperforming global growth rates over the next three to five years. Trump's "reshoring" objectives face significant challenges, as only 18% of companies redirected investments to the U.S., while 51% chose Southeast Asia as their preferred alternative. Sectors like chemicals, logistics, and industrial manufacturing are most exposed to tariff tensions.
Background
The trade relationship between the U.S. and China has been contentious since 2018, when former President Trump first imposed tariffs on Chinese goods. While a 'Phase One' trade deal was reached in 2020, most tariffs remained in place. Following his successful re-election in November 2024, President Donald J. Trump announced "reciprocal" tariffs in April 2025, escalating the trade war with duties exceeding 100% on Chinese products. These policies are intended to reshape global supply chains by encouraging manufacturing reshoring to the U.S. and reducing economic reliance on China.
In-Depth AI Insights
What does persistent corporate pushback despite overall profitability suggest about the long-term viability of high tariffs on China? This reveals a critical divergence between short-term financial resilience and long-term strategic concerns. While 71% of companies were profitable in 2024, the sharp drop in 2025 revenue expectations (45%) and bleak 3-5 year outlook (only 30% expecting China outperformance) indicate that tariffs are eroding future growth potential and market confidence. - This suggests that even if companies adapt to some extent, the structural damage to supply chains and market access is accumulating, potentially leading to a sustained decline in US competitiveness in China and global markets as investment shifts to Southeast Asia. How does the limited success of "reshoring" to the U.S. and the preference for Southeast Asia alter the investment thesis for different sectors? The data confirms that Trump's "reshoring" policy is largely failing to bring manufacturing back to the U.S. in a significant way, with only 18% redirecting investments there. Conversely, 51% chose Southeast Asia. - This reinforces the "China+1" or "Asia diversification" supply chain strategy, benefiting countries like Vietnam, Malaysia, and Indonesia in Southeast Asia. - For investors, this implies that manufacturing investments in the U.S. may need to be more concentrated in automated, high-tech, or subsidy-driven sectors, rather than labor-intensive industries. - Companies focused on Southeast Asian infrastructure, logistics, and manufacturing expansion (e.g., industrial REITs, port operators) could see long-term growth opportunities. What deeper risks do tariff volatility and the emergence of non-tariff barriers, like China's antitrust probe, pose for multinational corporations seeking growth in the Chinese market? Beyond direct tariff costs, non-tariff barriers (such as the antitrust probe faced by DuPont) and the overall volatility of trade relations pose a deeper, systemic risk to multinationals operating in China. - These risks include regulatory uncertainty, increased operational costs, restricted market access, and potential negative impacts on consumer sentiment. - They compel companies to reassess the risk premium for investing in China and may lead some to adopt defensive strategies, such as diversifying supply chains, reducing reliance on the Chinese market, or more cautiously managing intellectual property and technology transfers. - In the long run, this environment could accelerate the rise of domestic Chinese competitors, as they are not directly subject to these geopolitical frictions.