Intelligize Report Highlights Public Companies’ Rising Concerns Over U.S.-China Trade War

As the days when China was the United States’ largest trading partner seem further away than ever, a new report from Intelligize explores the trade war that has roiled geopolitical stability for more than seven years and shows no signs of abating anytime soon.

The report notes the opening salvo in the dispute in 2018 when the U.S. set tariffs on solar panels and washing machines, greatly affecting China. The dispute grew quickly, and national security concerns took center stage, shifting the focus of U.S. trade restrictions to advanced technology. “Although it is possible for the U.S. and China to reach an agreement at some point on purely commercial trade matters, the fundamental national security concerns driving U.S. policy are not going away,” the report observes.

Our report examines some of the major factors increasing the strife between the two global economic powers. China has come to view U.S. decisions on matters such as trade restrictions as part of a plot to blunt its development – one of its motivations for creating a self-sufficient economy impervious to U.S. trade restrictions. For the U.S., China’s aspirations continue to foster distrust about matters such as China’s military sophistication.

And how are publicly traded companies viewing the escalating trade war? We analyzed recent 10-K filings with the Securities and Exchange Commission (SEC) to find out more.  Overall, we discovered a steady increase over the last three years in companies’ SEC risk factor disclosures relating to the U.S.-China trade war.

In terms of turning down the heat between the two nations, that isn’t likely to happen anytime soon. China’s continuing military modernization and its rapid progress in high-tech fields are only increasing U.S. national security concerns. “Instead, all signs point to an expansion of U.S. trade restrictions to counter the national security threat from China,” the report notes. “Meanwhile, the U.S.-China great power competition will keep China at the center of U.S. strategic and economic policymaking.”

Download “The U.S.-China Trade War: Rising Risks for Public Companies” in its entirety from the Intelligize website.