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How does the United States’ relationship with China impact businesses?

On Behalf of | Oct 3, 2022 | Business Law

If your company does business in and with China, you probably have felt the strain of the troubled relationship between that country and the U.S. It is difficult not to feel an impact because of policy issues that have changed due to the issues between the nations.

There is currently a trade war between the two countries that is affecting businesses in both nations. This continued problem will shape how your company can operate in dealings with Chinese entities now and in the future.


The most significant concern by far is tariffs. The United States uses these as a punishment. They impose tariffs to try to tamper with trade with the other nation. By imposing high taxation on Chinese goods, it makes it harder for businesses to sell these goods for lower prices in the United States.

Tariffs increase the final price because they increase the costs to the business. If you are manufacturing a product in China to ship to the U.S., you will have to pay these higher taxes, which eats into your profits, causing you to raise the cost to consumers. It makes you less competitive overall.

Other factors

As things heat up between the two countries, there are other issues that will come up. It is possible that eventually shipping goods out of or into China will become more difficult. Investors are also likely to back off companies working in and with the nation due to the uncertainties. The impact will likely stunt business growth and lead to hard decisions about continuing to do business in China.