How Trump's trade war has hit these big-name stocks

  • The escalating U.S.-China trade war is bad news for America’s big international corporations.
  • Many of the best-known, most widely held stocks have taken big hits since President Trump’s May 5 tariff tweets.
  • Among them are Apple, Boeing, Intel, Tesla, Caterpillar and GM, and others that get significant sales in China or source products there.

Markets rebounded today from Monday’s precipitous sell-off, but the stock prices of some of the best-known American companies have taken a beating since President Donald Trump decided by tweet May 5 to escalate the trade war with China. He vowed to hike U.S. tariffs as trade talks disintegrated, and made good on that threat last Friday. U.S. stocks got a lift on Tuesday as Mr. Trump returned to hinting at a possible deal with Beijing.

Trump also said he would meet Chinese President Xi Jinping during the Group of 20 meeting of major economies on June 28 and 29 in Osaka, Japan. At the same time, the White House released a list of even more potential tariffs that, if enacted, mean almost every good imported from China would subject to a new duty. Tariffs are paid by the U.S. companies that import goods and often get passed on to consumers in the form of higher prices. 

Here are some of the widely held stocks that have taken big hits since Mr. Trump’s May 5 tweet, with results including Tuesday’s trading.

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Apple stock is down roughly 8%

Most of Apple’s products rely in some part for production in China, including iPhones. Apple also got roughly 20% of its sales from China in 2018, according to regulatory filings. Moving all of Apple’s assembly to the U.S. would require a 20% price increase, Bank of America analysts estimated. 

If iPhones sold in the U.S. are subject to a 25% tariff, it could hit Apple’s per-share profit by 9%, Bank of America analysts estimated in a note this week.

Who will be hardest hit by the trade war with China?

Deere stock is down almost 9%

Its tractors, combines and other agriculural equipment are suffering as the trade war and other factors hit U.S. farmers hard. China was the fourth-largest export market for U.S. farm goods last year, and even with existing retaliatory tariffs, it purchased $9.3 billion in U.S. agricultural products in 2019. But that’s down from $14 billion in 2017 and is forecast to tumble next year.

Intel stock is down about 10%

Intel and other chipmakers “represent clear worries” that the supply chain feeding technology makers will pass down high tariff costs to finished-goods makers — and ultimately consumers. That may slow demand for Intel’s chips — which are in virtually every kind of computer — analysts from Wedbush said in a note yesterday.

Boeing stock is down more than 7%

Boeing delivered its 2,000th plane to a Chinese airline in 2018 and predicts the country’s demand for them will double in the next two decades. But the future now seems more uncertain. In addition, the aerospace giant is coping with the grounding of its 737 Max aircraft, which has also cut into its previously high-flying stock price. 

Tesla stock is down almost 8%

Tesla’s Elon Musk has plans to build a giant factory in China as Asia’s electric-car market grows, a market China itself is striving to dominate. Tesla was the hardest hit automaker yesterday when China announced its retaliatory moves and global markets sank.

Caterpillar is down about 5%

Caterpillar’s sales in the Asia-Pacific region climbed last year mostly because of rising demand in China as construction boomed amid a push for more infrastructure, according to its regulatory filings. But in April, the company warned of losing market share in the country.

GM stock is down 1%

GM in April cited slowing China sales as one reason for its quarterly profit drop as the country’s auto sales in general have slumped for nearly a year, according to Bloomberg. GM is one of the biggest non-Chinese automakers operating in China and has cut production there.

“You can’t control tweets; you can’t control trade tensions,” GM Chief Financial Officer Dhivya Suryadevara told analysts Monday during an investor presentation, according to Bloomberg. “We are controlling everything we can control.”

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