The re-escalation of US-China trade tensions since “Liberation Day” has elevated disruption risks for Chinese firms. Drawing on corporate disclosures from listed companies in Mainland China and Hong Kong, China product-level trade elasticity estimates, and outward greenfield investment data, this note finds that Chinese firms have responded to the 2025 U.S. tariffs, ongoing restrictions, and broader trade tensions since 2018 through a combination of risk-sharing, internationalization, and localization strategies.
Looking ahead, firms are likely to deepen domestic substitution in strategic sectors while expanding overseas operations to safeguard market access and diversify exposure, though the effectiveness of these adjustments will depend on evolving global trade policies and market conditions.