Trade tensions make rest of world less keen to invest in US and China, survey finds

The global economic landscape is increasingly shaped by geopolitical friction, particularly the ongoing trade disputes between the United States and China. A recent survey by Allianz Trade reveals a marked decline in corporate appetite for investment in both economic powerhouses, with the US facing a more pronounced aversion.

While a complete decoupling between the US and China has not materialized, the survey indicates a significant drop in investment intentions toward China, falling from 53% to 24%. The United States has also seen a decrease, with only 13% of firms considering it an export growth platform, down from 17% previously. This trend suggests that heightened geopolitical tensions are casting a long shadow over global trade and supply chains.

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It’s clearly the understanding of companies that there will always be a rivalry between the US and China.

Ana Boata, head of economic research at Allianz Trade, highlighted the pervasive understanding among companies of a persistent rivalry between the two nations. She pointed to the enduring tariffs imposed by the Trump administration as a key factor, noting that "US administrations in general are very protectionist." This perception of protectionism and ongoing strategic competition appears to be dampening the enthusiasm of global businesses to commit capital to either country.

This reluctance to invest has broader implications for global economic growth. As major economies become less attractive destinations for foreign investment, the overall appetite for outbound investment globally declines. The findings underscore the complex interplay between trade policy, geopolitical relations, and international business confidence, suggesting a challenging environment for global commerce in the near future.

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Tariffs imposed by the first Trump administration in the US in 2018 “have never been taken away”, she said, adding that “US administrations in general are very protectionist”.