What does the current US sentiment on China mean for companies and investors?
A view for the next twelve months
Thoughts from a recent trip to DC and how investing in China, or supply chains that involve China, are likely to be seen by the incoming Trump Administration:
1: Security takes priority over commercial/business ties
2: China’s influence in supply chains will continually be scrutinized. An example being what recently happened to an Intel executive.
3: More due diligence and KYC compliance will be needed, especially after the pager attacks in Lebanon.
4: Any business ties to Chinese firms whether inside or outside the country will be scrutinized. Refer to the Intel executive above.
5: The “small yard and high fence” is becoming bigger and higher. We are on the slippery-slope with no end in sight, a roadmap of what the end-goals are, or when tit is finished.
6: The US government is now restricting US persons (citizens, green card holders, and those who work for US firms) from certain work or projects, which will further chill business ties.
7: Companies that invested in SE Asia (Vietnam, Thailand, etc.) could become targets of a Trump Administration that sees this as “getting around” export controls and tariffs.
8: Investments into Asian products, R&D, companies, or supply chains could be scrutinized.
9: Be prepared to answer questions such as: “Why are you not investing in the US?” or “Why do you support foreign countries by investing there instead of American workers?”
We have rougher waters ahead, be prepared to add more capability and analytical capacity in your supply chain and business strategy to weather these storms.