GM Ranked as the Most China-Exposed American Corporation

Last year, it wasn’t even in the Top 10. This year, they’re number one. General Motors was ranked as the most China-exposed U.S. multinational by Strategy Risks, a political risk consultancy in New York.

Ford was considered the most exposed to China in Strategy Risks’ 2024 report. The data is based on 2023 figures from the companies themselves; and government information about China partnerships, supply chains, sales data and other metrics used to gauge corporate risk to China. Ford dropped to seventh place this year, with GM taking over first place.

Like Ford, GM makes cars in China for export to the United States. One model – the Buick Envision – is subject to Section 232 tariffs of 25%, which stack against a slew of other tariffs. Despite duty drawbacks allowed on some tariffs for automakers, the Envision still sells at prices equal to rivals made in the U.S., revealing huge gaps in margin as GM’s China partners are able to maintain pricing despite higher import costs, something a lower margin business usually cannot do.

GM partners with the Shanghai Automotive Industry Corporation (SAIC), China’s largest automaker. They have a 50/50 joint venture and the Buick is made at their assembly line for the U.S. (and China) market.

GM also has a 50/50 partnership with design and engineering firm, Pan Asia Technical Automotive Center. But that is changing, and these changes put them higher on the list this time.

“We identified a small but significant dilution in GM’s ownership of some of the China joint ventures with state-owned-enterprises – GM now holds less than 50% in a few of them, compromising its control over business decisions,” said Juozapas Bagdonas, Senior Research & Product Sales Manager at Strategy Risks.

Outside of the auto world, Qualcomm’s high Business Fundamentals bar, as seen in the chart above, shows how much the company is reliant on China sales. Almost half of Qualcomm’s sales come from China. Last year, the U.S. revoked Qualcomm’s license to sell 4G chips and other semiconductors to Huawei.

China Unbowed: Supply Chain Reliance Continues

Derisking, decoupling, and record high tariffs have still not lowered the supply chain ties between mainland China and U.S. multinationals who have, in some cases, decades-old relationships with their suppliers. Major manufacturers Honeywell, Cummins and air conditioning giant Carrier are each enmeshed in China supply chains.

Strategy Risks’ Supply Chain score evaluates how vulnerable a company is to disruptions in China’s exports to the U.S. It looks at the U.S. company’s imports from China and evaluates it against the possible cost burdens of new tariffs, and the industry’s ability to pivot to alternative sources to lower those cost burdens. High scores here mean there is an increased likelihood that a company will face supply chain problems and price hikes they either have to bear themselves (eating profit margins) or pass along to consumers, potentially pricing them out of a market due to their China exposure.

Within the Top 10, Tesla is the most exposed company in terms of its supply chain needs due to its sourcing of lithium ion batteries. The Regional Issues category looks at a company’s exposure to political hot spots, such as Xinjiang and Tibet. Xinjiang, of course, is subject to the Uyghur Forced Labor Act. Strategy Risks says that both Ford and Tesla have a presence in those regions that could prove problematic.

This year’s Top 10 looked a lot like last year’s Top 10, but two companies fell off the list: Raytheon and Caterpillar. Raytheon, now known as RTX, has a lower Supply Chain exposure in China than last year, suggesting some derisking may have taken place. Worth noting, China targeted RTX’s missile defense segment with sanctions in late 2024 over arms sales to Taiwan, which froze the China assets of some of RTX’s subsidiaries. Caterpillar saw a drop in China sales last year, taking them out of the Top 10.

Strategy Risk comes out with their SR 250 list annually. The list of 250 publicly traded companies is designed to help corporations, investors, regulators, and consumers assess U.S. companies’ ties to China.