Research by Paweł Gałecki

The international trade landscape has reached a critical juncture, with geopolitical tensions increasingly overshadowing economic logic. The relationship between the United States, China, and the European Union, once defined primarily by the flow of goods, is now revealing deeper fractures that challenge global stability. In July 2026, the International Institute for Middle East and Balkan Studies (IFIMES) in Ljubljana published an analysis titled “ZDA-Kitajska-EU: Med sodelovanjem in razdrobljenostjo v svetovni trgovini”, which explores how escalating geopolitical rivalries have led to growing protectionism, tariff conflicts, and regulatory fragmentation. Despite deep global interdependence, the world trading system is gradually shifting toward a more fragmented and politically conditioned order, undermining long-term stability and efficiency. In 2025, the absence of new tariff increases marked a brief reprieve, though this was soon followed by renewed tensions under the second Trump administration. Tariffs were raised to levels threatening bilateral trade, prompting a 90-day ceasefire in May. However, the agreement was extended until November 2026 during the Davos forum. Analysts emphasize that stable economic ties among China, the U.S., and the EU remain crucial for protecting global supply chains. Yet data from the first quarter of 2026 reveals clear shifts: U.S.-China trade fell by 16.6% to $128.68 billion, while China’s trade with ASEAN rose by 18.4%, and with the EU by 17.6%. Despite these disruptions, fundamental complementarity among economies remains unchanged. Former U.S. Commerce Secretary Carlos Gutierrez suggested that a cooperation framework between both sides could serve as a model for a global system. Chinese companies, however, face mounting challenges due to tariffs, geopolitical pressures, and long-term commitments to the American market. According to a report by China's Economic Research Bureau regarding the U.S. in 2026, 79% of Chinese firms operating in the U.S. reported negative impacts from tariffs. Common consequences included rising import costs (39%), reduced profit margins (27%), and disruptions in supply chains (24%). Tariff uncertainty affected investment decisions, with 12% of firms delaying or reducing expansion plans. Notably, a surprising trend emerged: “position preservation,” with 73% of firms reporting no changes in investments compared to 53% in the previous year. Practical examples illustrate continued collaboration. For instance, Fujian Zhongjing Petrochemical imported 308,000 metric tons of propane from the U.S., accounting for 34.8% of its total imports, in the first four months of 2026. Similarly, JAC Auto Parts saw a 30% year-on-year increase in exports to the U.S., reaching 40 million yuan. Yang Weiguo of JAC emphasized that automotive markets in China and the U.S. remain complementary, and stable relations are essential for development. A significant portion of Chinese enterprises reported worsening conditions in 2025, with 21% noting substantial deterioration. Nevertheless, many demonstrated adaptability: 33% achieved revenue growth, and 81% remained profitable. Positive assessments of the business environment dropped to 9%, the lowest since 2018–2020. Particularly notable was the growth among high-margin firms. Companies with EBIT margins exceeding 15% increased from 7% in 2024 to 21% in 2025, the highest level in the survey’s history. This highlights operational resilience among firms leveraging competitive advantages. At the same time, 27% of businesses experienced declining profits, indicating polarization. Despite these difficulties, readiness for reinvestment reached record levels at 79%. Half of the surveyed firms planned to invest in new projects.