12 Major US Companies Losing the Most on China Trade War Fallout

Investing

Published: May 13, 2019 1:05 pm

Last Updated: January 30, 2020 8:52 pm

With the United States raising tariffs on $200 billion of foreign goods coming from China last Friday, and the promise of additional tariffs on other goods from China, a retaliation tariff hike from China means that the trade war has formally begun. While no one ultimately wins in a trade war, and while the outcome acts as an additional tax that consumers and business have to eat, there is strong conviction by President Donald Trump and by the Chinese alike to stick to what each country feels is in its best interest.

American consumers might be prepared for a longer trade war than the hopes had been even just 10 days earlier. And everyone seems to know that China historically has been able to take a view that is decades out, while the United States and other nations whose leaders are elected can be voted out of office every two, four, six or eight years. China’s leadership has no public elections to be accountable to.

Many U.S. companies that get substantial revenues from China saw their shares take a serious hit with the major stock market indexes on Monday. The Dow Jones industrials were down almost 600 points (2.3%) at 25,343, and the S&P 500 was down almost 68 points (2.3%) at 2,813.50 shortly after noon on Monday.

Here are 12 U.S.-based companies that have a rather well-known and well-documented exposure to doing business in China. Price moves shortly after noon were made, along with some basic color on each company.

Apple Inc. (NASDAQ: AAPL) is a major loser if tariffs and a trade war persist for too long. Its warning from January proved how much deterioration there was. Apple shares were last seen down 5.1% at $187.00, and the move may be exaggerated due to an antitrust case about its App Store being allowed to proceed.

Boeing Co. (NYSE: BA) has many jet sales to China, and there have been concerns that China might target the company specifically at the same time that China would like to get its own jet plane business more prominent on the global scene. Boeing shares traded down 4.1% at $340.18 on Monday morning. Boeing’s drop also can be tied to more potential delays of the 737 MAX fleet being “ungrounded.”

Caterpillar Inc. (NYSE: CAT) is a direct player in the global growth, with heavy machinery sales to the world’s growth engine and to countries that also do business with China being critical to their revenue forecasts. Caterpillar shares were last seen down 5.1% at $124.59.

Deere & Co. (NYSE: DE) is very similar to Caterpillar in many ways, including on foreign sales and with China being the world’s growth engine. Deere shares traded down 6.2% at $146.43 on Monday.

General Motors Co. (NYSE: GM) sells more cars in China than in any other country in the world, including the United States. Sales volume in China dropped by 17.5% in the first quarter. A 25% tariff on vehicles imported into China had been temporarily suspended while negotiations were continuing, and GM has joint ventures with Chinese carmakers Baojun and Wuling. GM’s stock was down 2.7% at $36.86 in midday trading.

Nike Inc. (NYSE: NKE) held up better than expected on Monday, but it is a dominant player in China’s $31 billion market for sportswear. Anta and Xtep, two Chinese online retailers, have been boosting investments and making a dent not only in Nike’s business but in that of other foreign sports gear giants like Adidas. Nike’s stock was down almost 2% at $82.30 on Monday, but this had been higher a week earlier as China trade war fears started to escalate.