US-China Trade Talks Set for Mid-March

The upcoming trade talks are layered over a complex history of tariffs, particularly those enacted under Section 301 of the Trade Act of 1974, which gives the U.S. Trade Representative broad authority to respond to unfair foreign trade practices. The Trump administration significantly broadened the use of Section 301 against China, imposing tariffs on approximately 75% of Chinese imports, citing concerns over intellectual property theft and technology transfer policies. These actions marked a shift from resolving disputes through the World Trade Organization to more unilateral measures. For manufacturers, the direct impact has been a significant increase in operational costs for those who import parts and materials from China, compressing margins and forcing difficult decisions about pricing. According to a 2026 report, 72% of trade professionals identified U.S. tariff volatility as the most impactful regulatory change, and 39% of companies now report absorbing tariff costs rather than passing them to customers, up from 13% the prior year. This has accelerated supply chain restructuring, with companies like Newell Brands (parent of Rubbermaid and Yankee Candle) reducing their sourcing exposure to China from 35% to 10% to mitigate a tariff impact expected to be $130 million in 2026. The "managed rivalry" strategy reflects a bipartisan consensus that the previous era of engagement with China is over, replaced by long-term strategic competition. This approach involves both containing China's influence in sensitive sectors through measures like export controls on advanced technology while also seeking cooperation on specific issues. It's a shift from seeking to change China to managing the risks of an intertwined economic relationship that is too systemically important to fully decouple. This persistent trade uncertainty is now a primary driver of reshoring and foreign direct investment in U.S. manufacturing. Job announcements related to these trends hit a record-breaking 360,000 in 2022. A 2025 survey found that avoiding geopolitical risk was a key motivator for 38% of manufacturers bringing production back to the U.S. The focus is particularly sharp in strategic sectors like semiconductors, electric vehicles, and critical minerals, where Washington has deployed industrial policies to bolster domestic supply chains. On the regulatory front, manufacturers face a convergence of new rules. In 2026, OSHA is advancing significant updates, including a potential federal standard for heat illness prevention in both indoor and outdoor settings and stricter enforcement of injury reporting. Simultaneously, the EPA is enforcing new regulations on PFAS "forever chemicals" reporting and other industrial emissions. For audit committees, the SEC has been signaling a shift in disclosure requirements. While a wide-ranging climate disclosure rule has been paused by the Trump administration, there is a clear trend towards expecting more detailed reporting on supply chain resilience and geopolitical risks. Many companies are recalibrating their ESG disclosures to more directly tie sustainability efforts to business value creation amid political shifts. The era of "polycrisis" is forcing internal audit functions to evolve from a compliance focus to a more strategic, advisory role. Geopolitical risk management, once a niche concern, is now pervasive, requiring internal audit to assess vulnerabilities in supplier locations, dependencies on trade routes, and exposure to energy price shocks. According to the Institute of Internal Auditors, geopolitical uncertainty saw one of the sharpest increases in risk ratings for 2025, prompting audit functions to expand advisory services and integrate more deeply with cross-functional teams to stress-test crisis response plans.