US Business Confidence in China Rebounds as Trade Truce Eases Tensions

An AmCham Shanghai survey shows 58% of US firms optimistic about China's five-year outlook, up 17 points from 2025, following a late-2025 trade agreement that paused tariff escalations.

American companies in China have swung sharply toward optimism after confidence hit record lows in 2025 amid tariff wars and geopolitical strain. An annual survey by the American Chamber of Commerce in Shanghai released Thursday found 58% of respondents optimistic about their five-year China outlook, up 17 percentage points from the prior year and breaking a four-year streak of historically low confidence. The turnaround reflects improved financial performance and reduced policy uncertainty. Some 78% of surveyed firms reported profits in 2025, the highest share since 2019. A trade truce agreed between Washington and Beijing in late 2025 paused tariff escalations and export controls, removing a major source of uncertainty that had depressed sentiment for years. Companies are also watching for further signals of stability ahead of a planned Xi Jinping visit to Washington later this month. Domestic competition, rather than US-China tensions, has emerged as the top challenge for US firms. Sixty-eight percent cited local rivalry as their primary concern, up from 53% citing bilateral tensions. This shift suggests the business community sees the acute geopolitical risk as moderating, though concerns about China's slowing domestic economy persist in the background. Investment momentum is turning as well. Twenty-eight percent of respondents increased China investment in 2025, the highest share in four years, while 31% plan to increase spending in 2026. Only 14% expect to reduce investment. The survey of 262 companies also showed a 7-point rise in firms viewing China's regulatory environment as transparent, to 55%, though expectations for further regulatory opening ticked down slightly.

How could this affect you

Traced by who's actually in the path of this — not everyone is.

Likely

If you operate or have exposure to US companies with China operations

Sustained business confidence and renewed investment could stabilize earnings from China-exposed firms, but depends on the trade truce holding beyond its November renewal date and Xi's visit not triggering new tensions.

Possible

If you manage exposure to US-China policy risk

Sentiment momentum could embolden US companies to resist further tariff increases, potentially shifting the Trump administration's calculations on China trade policy if enough corporate voices push back in the coming months.

Possible

If you track China's economic stabilization

Renewed US business investment in China—if it materializes at the stated 31% rate—could provide modest demand support for Chinese growth, though domestic competition concerns suggest a crowded market with limited pricing power for new entrants.

Off-Lens

Who is covering this — and who is not.

2 articles · 2 countries · via GDELT

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🇭🇰scmp.com 🇨🇳globaltimes.cn

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🇺🇸 United States

Chanakya's Move

Whose move this was, what they're betting on, what could counter it.

Trump and Xi appear to be executing a tactical trade pause: they arrest the tariff spiral, claim a win, and buy time for the November renewal negotiation while corporate sentiment recovers and Xi makes a state visit. The bet is that stabilized earnings and renewed investment create political cover in both capitals to extend the truce beyond November. The counter-move is clear: if domestic US political winds shift or new China tensions (Taiwan, tech, security) emerge before November, either side could upend this fragile sentiment rebound by reimposing tariffs. The survey shows US firms have learned to mistrust stability; they're investing cautiously and watching Xi's visit like a market event, not a diplomatic milestone.