Trade pressures are caught swinging over U.S. firms notice in China

February 21, 2023: According to a hazard consultancy, U.S. and European multinational companies are cautious about their capital investments in China due to geopolitical concerns.

Richard Martin, which manages director of IMA Asia, said the ongoing U.S. trade issues with China are the main reason for the investment warning shown by American companies.

“Without a doubt, it is a geopolitical threat regarding U.S. firms were becoming more careful from the Trump administration on the trade war,” he said.

The White House, with President Joe Biden, reviews the penalties imposed under retired President Donald Trump. Trump levied tariffs on Chinese goods in a long-running retaliatory trade war with Beijing to bolster U.S.-made interests.

As for European firms, Martin noted Russia’s invasion of Ukraine has led to concerns regarding Beijing.

At the board stage, you sit there and say, ‘We are losing our shirt in Russia. We had to shut down our operations and sell out.’ Could that happen in China? And of course, the answer is, yes, there is,” Martin stated.

“So we are scrambling with their China operations, questioning how we mitigate the threats?”

Even at 3% or 4% development, China will add dollar value in the coming five years than the U.S. You can’t walk away from starting that.

Russia’s invasion of Ukraine almost a year ago prompted an increasing list of companies to shun doing business with Moscow. The companies scrambled to cut ties as foreign governments ratcheted up punitive economic sanctions.

European energy majors like BP, Shell and Equinor announced plans to end joint ventures in Russia.