Majority of U.S. Firms in China Plan to Stay and Invest Despite Tariff Pressures, Survey Finds

A large majority of American companies doing business in China said they intend to stay and many plan to expand investment there despite rising U.S. tariffs and mounting bilateral tensions, according to a new survey.

The nonpartisan US-China Business Council (USCBC) found that 73% of the more than 270 U.S. companies it surveyed reported no plans to move operations out of China, and 52% said they planned to invest in China this year. The survey also reported that tariffs have jumped to the respondents' second-biggest business concern, behind overall U.S.-China relations, after ranking eighth on the group's list of challenges last year.

Respondents described a calculus driven by scale, supply chains and sunk costs. Companies cited deeply embedded supplier networks, the size of the Chinese consumer market and the high cost and complexity of shifting manufacturing or sourcing to other countries as key reasons for remaining.

"Simply put, we're trapped," said Judd King, founder of Los Angeles-based Starlux Games, which sources LED components from China for consumer products. The comment, relayed to Politico, reflected a broader theme in the survey: many firms feel compelled to absorb higher duties rather than relocate operations.

The survey was conducted as the White House's tariff measures on Chinese imports have increased costs for companies reliant on cross-border trade. Respondents reported paying higher duties and facing greater uncertainty when planning investments and managing supply chains. Despite those pressures, a majority said their near-term strategy is to maintain or increase their on-the-ground presence in China.

USCBC members span industries including manufacturing, technology, finance and services. The council, which describes itself as a nonpartisan, nonprofit association, said the results reflect how companies weigh short-term cost increases against long-term market access and operational realities.

Analysts and corporate leaders pointed to several practical constraints that limit near-term relocation. These include the time and expense required to establish or scale alternative production facilities, retraining workforces, negotiating new supplier relationships and navigating different regulatory regimes. For many firms, those hurdles outweigh the immediate hit from tariffs.

However, the survey also signaled growing concern about bilateral political risk. While tariffs were cited as a rising worry, respondents placed the overall state of U.S.-China relations as their top concern, underscoring how policy uncertainty and geopolitical tensions influence strategic planning.

Some firms are adjusting strategies short of relocation. Companies reported diversifying supply chains where feasible, increasing local sourcing within China, and recalibrating product pricing to pass some costs to customers. Others said they were monitoring markets elsewhere for potential, longer-term manufacturing alternatives but described few immediate plans to execute large-scale moves.

The survey's findings come amid a broader debate over the economic costs and benefits of decoupling complex trade and investment ties with China. Policymakers in Washington have cited national-security and competitiveness concerns as reasons to press for reduced dependence on Chinese suppliers, while business groups have warned that abrupt shifts could raise costs for consumers and disrupt global production networks.

USCBC said its members will continue to reassess plans as policy and market conditions evolve. For now, the survey indicates that many U.S. firms conclude that remaining in China — and in some cases increasing investment there — is the most viable option despite the added expense and uncertainty created by tariffs and strained bilateral relations.