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U.S.-China Competition Simmers For Now

The U.S and Peoples Republic of China flags held one in front of the other against a blue backdrop, blending their colors while showing opposing sides at odds. Representative of U.S China Relations simmering.


U.S.-China relations are, arguably, in their worst condition since 1972. Both nations are overtly competitive, with few, if any, areas of agreement. Biden administration & PRC (People’s Republic of China) policies have been slowed/stalled this year but could still come to fruition by year-end. Short-term economic focus may thaw some tariffs, but unreconcilable issues remain. Relations could worsen depending on the results of the November 2022 election and on macroeconomic pressure.

This report represents the combined effort of Cowen’s Research Department. It includes inputs from 7 Washington policy and 16 equity analysts. It is our second report (see the first here) to describe the changing U.S.-China relationship and how U.S. policy is affecting investment themes for companies that have exposure to the relationship.


The U.S.-China relationship remains on a competitive trajectory, although broader global concerns have temporarily put it on pause in 2022. For now, domestic U.S. politics, rising global inflation, slowing economic growth, an unexpected war in Europe, and the ongoing pandemic have combined to slow the U.S.-China geopolitical competition.

The Biden administration and the U.S. Congress continue to debate tougher U.S. policy towards China, but the most severe measures have been delayed. While there could be some short-term positives (i.e., targeted tariff relief), we believe both governments will continue to implement policies, laws, and regulations that will push the U.S. and China further apart, drawing their own orbits of allies with them.


  • June 21: UFLPA (Uyghur Forced Labor Prevention Act) impact on U.S.-China trade, inflation, and retaliation
  • Summer: White House tariff decision
  • November 8: Midterm election impact on China policy
  • Late November: Potential PCAOB (Public Company Accounting Oversight Board) deadline to start audit inspections
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