American companies in China are reporting record-low new investment plans for this year and declining confidence in profits, while uncertainty in U.S.-China relations and President Donald Trump’s tariffs have become their top concerns, according to a business survey released Wednesday.

The companies are also challenged by China’s slowing economy, where weak domestic demand and overcapacity in local industries are eroding profitability for the Americans.

“Businesses in China are less profitable now than they were years ago, but risks, including reputational risk, regulatory risk, and political risk, are increasing,” said Sean Stein, the president of the U.S.-China Business Council, a Washington-based group that represents American companies doing business in China.

The survey, conducted between March and May and drawing from 130 member companies, came after the two countries clashed over tariffs and nontariff measures, including export controls on critical products such as rare-earth magnets and advanced computer chips.

Wholesale inflation cools

U.S. wholesale inflation cooled last month, despite worries that President Donald Trump’s tariffs would push prices higher.

The Labor Department reported Wednesday that its producer price index — which tracks inflation before it hits consumers — was unchanged in June from May and up 2..3% from a year earlier. Both measures came in below economists’ forecasts. Excluding volatile food and energy prices, so called core producer prices were also unchanged from May and up 2.6% from June 2024.

The report on wholesale inflation arrived a day after the Labor Department reported that consumer prices last month rose 2.7% from June 2024, the biggest year-over-year gain since February.