“Chinese companies view American and EU companies as very risky, in large part because so many American and EU companies are looking to move their manufacturing out of China.”

A major potential avalanche of risks is those that would shake the business world should, as some expect it will, trade relations between China, America, and the EU come to an end.

China is America’s largest trading partner, a relationship responsible for $600B a year in commerce, according to the Office of the U.S. Trade Representative. By comparison, U.S. / European Union trade exceeds $1T. The trade deficit with China for goods is more than $300 billion, while the U.S. has a trade surplus for services of $25B. China is America’s largest supplier of imported goods, while China is America’s third largest export market. U.S. invests roughly $125B in China, compared to China’s investment of $38B in the U.S. The figures vary wildly depending on who you ask, but the Trade Representative puts the U.S. GDP at $21B and China’s at more than $14B.

In case you missed it, U.S./China relations have been strained. President Trump cast a spotlight on the downsides of the relationship for the U.S., and China’s response to the sanctions imposed on Russia by President Biden and the West for invading Ukraine has made the relationship even rockier. The U.S./China marriage needs some serious counseling. Eventually, experts say, the couple is headed for divorce. How that breakup plays out, especially if or when China takes custody of Taiwan – peacefully or otherwise – is something the business world needs to brace for.  No, seriously. For example, should the West impose sanctions on China similar to those on Russia, the shift in the business world would be tectonic.

Joining me on this episode is Dan Harris, a leading authority on the legal and strategic aspects of conducting business in emerging markets. Dan is co-founder of the international practice of Seattle-based HarrisBricken, which has offices across the U.S., as well as in China, Spain, Mexico, and Brazil. His China Law Blog was named, and with good reason, to the ABA Journal’s “Blawg Hall of Fame.”

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Tom Hagy
Litigation Enthusiast and
Host of the Emerging Litigation Podcast
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FILED UNDER: Complex Litigation | Regulations + Compliance​​
TAGS: Corporate & Securities | International Law | Risk Management