'The chokepoints now run both ways': JPMorgan says 5 forces are quietly reshaping the US-China balance of power

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Between tariffs, political posturing and the war in Iran, the relationship between the U.S. and China is a tense one these days. And that uncertainty can add a layer of volatility to the markets, which impacts both investment and retirement accounts.

Rival nations don’t have to resolve all of their differences to work together. In the Cold War, for instance, the Soviet Union was still a customer of U.S. wheat (1) and corn — and U.S. companies laid the groundwork to open locations (2) in the country. So, the recent summit between leaders of the U.S. and China, while it failed to yield (3) many confirmed deals, was an important step in ending some of the uncertainty the past few years have brought.

JPMorgan (NYSE: JPM), in a note to investors (4), said it saw five forces that could reshape the equilibrium between the two countries. And that, in turn, could lead to everything from lower retail prices to increased optimism on Wall Street.

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While the trade link between the countries has weakened, it hasn’t vanished, the bank said. China is still a country that’s dependent on trade. It’s simply less dependent on the U.S. than it used to be. U.S. imports from China hit lower points last year than during the pandemic and are expected to drop even further this year.