American companies are growing increasingly wary of investing in China amid rising tensions between the world’s two largest economies, despite Beijing’s efforts to woo foreign investors, a US business group has warned.

“Our companies are concerned not only about the political risks between the two countries, but also about trade barriers and any uncertainties around investing in China,” said Michael Hart, president of the American Chamber of Commerce in China (AmCham China), at a launch event for the group’s 2025 white paper on Friday.

The annual report, which assesses the operating environment for US businesses in China, found that strained US-China relations remained the top concern of AmCham China’s members for the fifth consecutive year, with 63 per cent of respondents naming it as their biggest operational challenge.

Relations have only grown more fraught since AmCham China conducted the survey of more than 350 US firms in late 2024, with the two powers locked in an escalating trade war that has seen both sides raise tariffs on each other’s goods by more than 120 per cent.

Hart said both Chinese and US commerce authorities had been collecting feedback from companies to assess the impact of the current tariffs, as he urged both governments to prioritise creating a stable policy environment for US-China economic relations going forward.

“It does look like both governments are looking carefully and don’t want to stop trade overall,” he said.

“Anecdotally, companies are reporting that they’re able to bring in some items without tariffs,” he added. “We haven’t seen an official announcement. We’ll wait for that.”