US Firms: China Market Vital for Global Competitiveness
By Varun Mittal
A survey by the US-China Business Council reveals 95% of US companies deem China operations essential for global competitiveness, despite tariffs and export controls.
US Firms Depend on China for Global Edge
US companies view their operations in China as crucial for global competitiveness, with 95% of firms surveyed by the US-China Business Council highlighting its importance.
The council’s 2026 Member Survey, which included responses from 175 companies, underscores China’s indispensability despite ongoing trade frictions.
Key Findings from the Survey
- 95% of respondents consider their China operations important for global competitiveness.
- 72% of companies reported being affected by tariffs, leading to increased costs and depressed sales.
- Nearly half of all respondents are impacted by US export controls, causing lost sales to both Chinese (61%) and international (47%) competitors.
- Despite challenges, 92% of companies reported profitable operations in China in fiscal year 2025, a 10 percentage point increase from the prior year.
- These profits are used to fund global expansion (53%), support US jobs (33%), and finance US-based R&D (32%).
China: A Production and Innovation Partner
Sourabh Gupta of the Institute for China-America Studies noted China’s transition from a mere global production partner to a production and innovation hub.
He highlighted China’s “unmatched economies of scale, its dominance in the production of intermediate goods, and its burgeoning creative capabilities”.
The report emphasizes that China is “not optional” for US companies, citing the rise of sophisticated Chinese competitors with advantages in scale and local innovation.
Navigating Trade Frictions and Future Steps
Tariffs continue to raise costs and depress sales, while export controls reduce sales and benefit competitors, as stated by Jack Midgley of Midgley & Company.
Experts recommend narrowly drawing “hard security lines” concerning critical infrastructure and sensitive data, rather than overly expansive measures.
For future predictability, honoring existing agreements and engaging in transparent dialogue among commercial leaders is seen as crucial for building confidence. Gupta called for honoring existing agreements, specifically to “conform and honor the terms of their consensus in Busan … and extend the terms of their Busan arrangement for the entirety of the (Donald) Trump term.”