Despite mounting political and economic strain between the U.S. and China, many American companies remain reluctant to scale back their operations in the world's second-largest economy.

What To Know: According to a new report commissioned by the U.S. Chamber of Commerce Foundation and cited by The Wall Street Journal, a majority of surveyed firms still see strategic value in maintaining or expanding their presence in China — even as they increasingly view it as their biggest geopolitical risk.

The report, based on surveys and interviews with nearly 200 businesses, highlights a disconnect between Washington's push for "selective decoupling" and corporate America's entrenched reliance on China's manufacturing capacity, skilled labor, and vast consumer market.

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Per the WSJ, roughly 70% of participating U.S. Chamber members indicated plans to maintain or grow Chinese engagement, despite concerns over Beijing's tightening regulatory environment and the rising specter of conflict across the Taiwan Strait.

What Else: Those long-term worries came into sharper focus Tuesday after White House Press Secretary Karoline Leavitt confirmed that President Donald Trump's 104% tariff on Chinese imports will take effect at 12:01 a.m. ET on Wednesday. "It was a mistake for China to retaliate," Leavitt said, reiterating the administration's hardline stance.

Financial markets quickly reversed early gains, with the SPDR S&P 500 ETF Trust ( SPY ) closing down 1.7% and the SPDR Dow Jones Industrial Average ETF Trust ( DIA ) sliding 1.2% on Tuesday.

The tariff announcement dampened hopes of near-term trade resolution and heightened fears of broader economic fallout, echoing concerns raised earlier Tuesday by Chicago Fed President Austan Goolsbee regarding potential growth slowdowns linked to trade policy.

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