As the US and China brawl, global businesses find themselves on the front lines
- Sanctions and export controls, threats of visa and investment restrictions: ‘Companies feel buffeted by all of this negative news,’ business consultant says
- Firms retool their assessments and make contingency plans as the list of threats to their bottom line constantly shifts
As US-China relations crater and the Trump administration rolls out a blizzard of anti-China measures, global companies are struggling to navigate and make contingency plans for economic and political risks until recently seen as long shots.
“Proposals are no longer considered outlandish and their odds of implementation are rising,” said Henrietta Treyz, economic policy director with Veda Partners, which advises clients on political and economic business risks. “We fully anticipate the US-China relationship will become more strained from here.”
That’s a pretty safe bet. Washington announced sanctions on 33 Chinese entities effective June 5 and threatened a ban on all Chinese passenger flights and on some Chinese students studying in the US.
The administration also claims it is ready to leave the World Health Organisation in the middle of a global pandemic over perceived Chinese bias; threatened to heap massive trade, investment and visa restrictions on Hong Kong after passage of a tough Chinese security law; and spurred fears it could scrap the phase one trade deal altogether.
And that’s only the past few weeks.
06:21
Hong Kong and the US: how much do they rely on each other economically?
“This is a just a breakdown of the trading system between the two countries,” said Jeff Moon, head of Moon Strategies consultancy and formerly with the Office of the US Trade Representative. “It’s symptomatic of a patient that’s sick and getting sicker.”
