How do Chinese and American listed companies view tariffs?

Recently, the global trade tensions seem to have temporarily eased. During the 90-day suspension of "reciprocal tariffs," the Trump administration has been actively engaging in trade negotiations with countries such as India, Japan, South Korea, and the United Kingdom. Among them, the trade negotiations between the U.S. and the U.K. have progressed the fastest, with the U.K. being the first to reach an agreement. On May 8, the Trump administration officially announced the framework text of the U.S.-U.K. trade agreement in Washington.

After the trade negotiations between China and the U.S. held in Switzerland, a joint statement titled "Joint Statement of the China-U.S. Geneva Economic and Trade Talks" was released. According to the statement, the U.S. will retain a 10% reciprocal tariff on Chinese goods while suspending the implementation of an additional 24% tariff for a period of 90 days. Since the Trump administration took office, including a 20% tariff on fentanyl, the U.S. has cumulatively imposed a 30% tariff on Chinese goods.

However, there are still many uncertainties before a formal trade agreement is reached. In this highly uncertain trade environment, how do the listed companies in China and the U.S. view the tariff issue?

I. The "Tax" Content in the Financial Reports of Chinese and U.S. Listed Companies

As of May 5, a total of 5,516 A-share listed companies have released their first-quarter reports for 2025, among which 41 companies mentioned the term "tariff" in their reports. These companies are mainly concentrated in industries such as machinery and equipment (mainly general equipment), pharmaceuticals and biotechnology (mainly medical devices), automobiles (mainly auto parts), light industry manufacturing (mainly household goods), home appliances, and power equipment.

During the same period, the frequency of U.S. listed companies mentioning "tariff" was significantly higher than that of Chinese listed companies. Among the 1,185 U.S. listed companies that released first-quarter financial reports, 276 companies explicitly mentioned "tariff"; while among the 1,809 companies that held earnings call meetings, the number of companies mentioning "tariff" reached as high as 710.

These mentions are mainly concentrated in the manufacturing sector, specifically including the following sub-industries: (1) measuring, analyzing, and controlling equipment, photographic, medical, and optical products, clocks; (2) electronic devices and components (excluding computing devices); (3) industrial and commercial machinery and computing devices; (4) chemical products.

Overall, in this round of China-U.S. trade friction, the "tax" content in the financial reports of U.S. listed companies is significantly higher than that of Chinese listed companies.

II. Attitudes of Chinese and American Enterprises Towards "Tariffs"

The attitudes of Chinese A-share listed companies towards tariffs show significant industry differentiation. There are 24 companies with a "negative" attitude and 13 companies with a "positive" attitude. Specifically, companies with a "positive" attitude are mainly concentrated in the power equipment and electronics industries, while those with a "negative" attitude are mainly concentrated in the machinery and automotive industries.

Listed companies that are relatively optimistic about tariffs can be divided into two categories.

The first category consists of companies that have already established production bases overseas and successfully built a diversified market structure.

Power battery company GreeNmei has locked in high-quality core-shell precursor orders in advance, securing high-end markets in Japan and South Korea as well as Europe. The company is building a globally leading green nickel industry chain manufacturing system and actively expanding into international markets, with a business network covering major new energy markets in South Korea, Southeast Asia, Europe, and the United States, meeting global customers' diverse needs for green battery materials.

Home goods company Tianzhen Co., Ltd. has invested in building production bases in Vietnam, Thailand, and the United States, and has shifted the majority of its U.S. export orders to factories in Vietnam, Thailand, and the United States.

The second category believes that recent changes in trade conditions may trigger a domestic substitution effect, thereby promoting further enhancement of domestic industry autonomy.

In the semiconductor industry, as downstream companies' concerns about the security and price volatility of the U.S. chip supply chain increase, the market demand for localized stable supply chains has significantly risen. Zhongying Electronics has attracted some clients that originally relied on U.S. suppliers, leading to a substantial increase in business cooperation opportunities.

Dinglong Co., Ltd., as a leading domestic supplier of semiconductor materials, has achieved self-control over upstream core raw materials. In the current new international trade landscape, the company is actively seizing market opportunities to accelerate customer expansion and market share growth.

In contrast, companies that hold a pessimistic attitude towards tariffs often have a high proportion of overseas revenue and the U.S. is one of their important markets. Due to the impact of tariffs on exports, these companies have seen a decline in revenue and have also borne some of the tariff costs, leading to a decrease in profits.

In the face of challenges, Chinese enterprises are actively improving their global supply chain systems to mitigate tariff risks.

CIMC Vehicles is actively improving its global supply chain system, focusing on the North American region. By continuously optimizing procurement processes, these companies steadily increase the local procurement ratio to enhance the efficiency and stability of the supply chain At the same time, the company has established a backup supply guarantee mechanism in countries and regions such as ASEAN, further enhancing the resilience of the supply chain and ensuring stable supply globally.

Although Zhongxin Co., Ltd. received a preliminary tariff rate of 5.99% in the U.S. Department of Commerce's anti-subsidy investigation into "thermoformed molded fiber products" from China and Vietnam, it has proactively set up production bases in Thailand and successfully achieved exports to the U.S. in early April.

Unlike Chinese listed companies, U.S. listed companies generally hold a more pessimistic attitude towards tariff issues.

In the first quarter earnings reports of U.S. stocks, 171 U.S. companies expressed negative attitudes towards tariffs, with only 10 companies holding a positive view, while the remaining companies maintained a neutral stance. From an industry distribution perspective, negative attitudes are mainly concentrated in the manufacturing sectors of electronic devices and components, industrial and commercial machinery and computing equipment, and chemical products.

In the earnings call, the number of companies with a negative attitude towards tariffs was 353, while those with a positive attitude numbered 91. Negative attitudes remain concentrated in the manufacturing sectors of electronic devices and components, industrial and commercial machinery and computing equipment, chemical products, as well as measurement, analysis, and control equipment.

U.S. companies that hold an optimistic view on tariffs have various reasons.

Some companies plan or have already raised prices, passing the costs brought by tariffs onto consumers.

Sika International, a company focused on durable goods wholesale, has taken a series of measures including price increases to cope with the impact of tariffs.

Newell Brands, a company engaged in the production of rubber and other plastic products, has also adjusted prices to mitigate tariff risks.

Howmet Aerospace, a company in the primary metals industry, plans to transfer costs related to tariffs to customers through a cost pass-through mechanism.

Other companies have products listed on the tariff exemption list, thus believing that tariffs will not affect their financial statements in 2025.

Many products under Federal Signal Corporation fall within the scope of tariff exemptions in the transportation equipment industry.

Some companies are beneficiaries of tariff policies.

Alcoa's net income in Q1 2025 saw significant growth, mainly benefiting from rising prices of bauxite and aluminum products.

In contrast, U.S. companies with a pessimistic view on tariffs face numerous challenges.

Some multinational companies mentioned that the high uncertainty of tariffs makes it difficult for them to formulate effective business plans

EverSpin Technologies, a company in the electronic devices and components sector, stated that the ongoing uncertainty in trade policies has made short-term and long-term strategic planning with partners and customers more complex, especially regarding key decisions in recruitment, product strategy, capital investment, supply chain design, and regional expansion.

Another part of the company is concerned that new tariff policies or trade restrictions may lead to supply chain disruptions and delays, which could negatively impact material costs and production processes.

Nurix Therapeutics, a company in the chemical industry, believes that supply chain disruptions and delays caused by trade restrictions may adversely affect material costs and production processes.

Arts Way Manufacturing, a company in the industrial and commercial machinery and computing equipment sector, has received notifications from some suppliers regarding the need to bear part of the tariff costs in the future, and expects these tariffs to have a certain impact on its gross profit.

In addition, retaliatory measures that other countries may take will also impact the company's business and lead to increased costs.

Harmonic, a manufacturer of electronic devices and components, disclosed that some of its European customers are undergoing verification by local customs authorities regarding the tariff classification of imported products. Due to differences in import tariff policies among countries, if products are reclassified into a higher tariff category, it may lead to increased operational costs for the company, thereby negatively affecting its financial performance.

Overall, this trade war has triggered significant concerns among U.S. listed companies, while Chinese enterprises have accumulated certain coping experiences through the first round of trade friction, adopting a more proactive stance to mitigate the impacts of the new round of tariff policies. This is also reflected in the stock market trends of both countries; compared to the "Liberation Day" on April 2, the maximum decline of the SP500 index was 12.1%, while the maximum decline of the CSI 300 and Shanghai Composite Index was 7.6%.

Article authors: Song Xuetao, Li Mengying, Source: Xuetao Macro Notes, Original title: "How Do Chinese and American Listed Companies View Tariffs? (Guojin Macro Li Mengying)"

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