Trump Goes to China With Plenty of Backup
October 29, 2017 by Paul Ausick
For his part, the president is shepherding about 40 U.S. company representatives along on the trip, all of which are reportedly working on deals in China. The value of the top deal is tagged at more than $7 billion and involves a new crude oil pipeline running from the Permian Basin in Texas to the Gulf Coast.
According to a report at Bloomberg News, some of the companies sending representatives along include General Electric Co. (NYSE: GE), Honeywell International Inc. (NYSE: HON), Boeing Co. (NYSE: BA) and Qualcomm Inc. (NASDAQ: QCOM). One company that has said it is not participating in the trip is Caterpillar Inc. (NYSE: CAT).
The Permian Basin pipeline project includes an investment by China’s state-controlled China Petroleum & Chemical Corp. (NYSE: SNP), aka Sinopec. Other partners in the project include ArcLight Capital and Freepoint Commodities. The deal also includes an expansion to oil storage facilities in the U.S. Virgin Islands, where recent hurricanes have caused so much damage. The project still requires approval from both countries governments.
The U.S. company with the most immediate issue related to China is Qualcomm, which earns about half its global revenues in China and is currently in a legal battle with Apple while trying to get Chinese government approval for its pending $38 billion merger with NXP Semiconductor.
24/7 Wall St.On the diplomatic front the top-of-mind issue is North Korea’s development of nuclear weapons and how the United States can enlist China’s help in stopping that development. Not only that, but the president will be expected to tell both South Korea and Japan that the United States is fully committed to bilateral defense agreements with the two countries. By all accounts, these are delicate issues and will not be easy to navigate.
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