American Express Shares Drop 3.09% Amid Persistent China-India Trade Ties

American Express (AXP) shares declined by 3.09%.

In recent years, American policymakers have been urging U.S. companies and other Western multinational corporations to reshuffle their business operations back to the United States or to “friendly shores” to reduce reliance on Chinese production and supply chains. This “de-risking” strategy aims at diminishing China's status as a global manufacturing powerhouse and limiting its growth. The Biden administration has also intensified its relationship with India in response, encouraging economic cooperation in sectors like IT, space exploration, and renewable energy.

However, these strategies have not shown significant progress. Reports suggest that China remains crucial to India's manufacturing sector, with Indian imports from China growing at twice the rate of its overall imports. Despite attempts to reduce dependency, India's need for Chinese goods is increasing.

This scenario reflects the complexities and interdependencies of global supply chains. China's comprehensive industrial system and huge domestic market continue to make it indispensable for many multinational companies, despite external pressures to relocate operations.

Indian government measures to allow Chinese investments more liberally and streamline visa processes for Chinese personnel are indicators of the growing economic ties. Meanwhile, American officials acknowledge that a complete decoupling from China's output is unrealistic and would unnecessarily elongate and complicate global supply chains.

Many U.S. policymakers might need to reconsider their "de-risking" strategy and prioritize what genuinely benefits the country economically, possibly setting aside ideological biases, even if only momentarily.