• Chinese President Xi Jinping calls for a fair environment for Chinese firms operating in the US.
  • The appeal comes amid a sharp deterioration in US-China trade relations following the 2024 US election.
  • Business uncertainty and tit-for-tat tariffs are dampening investment and long-term optimism on both sides.

Chinese President Xi Jinping has publicly expressed hopes that the United States will provide a fair business environment for Chinese companies, a statement that underscores the profound friction defining current US-China economic relations. The plea, delivered against a backdrop of rising tariffs and regulatory unpredictability, highlights the operational challenges facing multinational corporations from both nations.

The US-China trade relationship has become markedly strained in 2025. Following the re-election of Donald Trump and a series of retaliatory trade actions, tariffs have surged to become the second most pressing bilateral issue for US firms operating in China. The business environment is now seen as increasingly volatile, with policy changes and investment restrictions creating substantial uncertainty. This has led to a record low in investment plans, with only 48% of US companies planning to invest in China this year.

Policy-related obstacles remain a chronic concern. The Trump administration is widely expected to continue imposing new tariffs and stricter investment rules, which in turn fuels reciprocal policy tightening from Beijing. This cycle of tit-for-tat measures is severing customer relationships and damaging the competitiveness of firms operating across the Pacific. People familiar with the matter suggest that without a de-escalation, companies on both sides would be forced to accelerate supply chain decoupling.

The societal impact is also intensifying. Support among the Chinese public for economic retaliation—including consumer boycotts against US companies—is rising, which significantly raises the risk profile for American multinationals. While most companies report stable short-term profitability, long-term optimism is declining due to persistent uncertainty and fears of overcapacity.

Efforts to maintain stable commercial relations have repeatedly hit a snag. Industry watchers expect official impediments and consumer actions targeting US firms in China to increase, with parallel risks for Chinese companies seeking market access in the US. The lack of optimism for the future suggests muted investment and the possibility of permanent damage to bilateral commercial relations, a situation that continues to evolve with each new policy action.