US Media: Apple, Intel, etc. Will Become Victims of China-US Trade War

SAN FRANCISCO, Beijing morning news on the 23rd, according to CNN’s financial website CNNMoney report, the Trump administration announced on Thursday that it will impose tariffs on US$50 billion worth of goods imported from China each year and limit China’s technology industry to the United States. Investment, causing people to worry about the outbreak of trade war between China and the United States, the US stock market plummeted.

For some large US companies, the trade war with China is a very bad news.

If China takes retaliatory measures, the days of the Dow and the S&P 500 Index's Apple, Boeing, Intel and other multinational companies will become sad.

Apple earned US$18 billion in revenue from the Chinese market last quarter, accounting for 20% of its total sales. Boeing’s sales in the Chinese market last year reached nearly US$12 billion, which is nearly 13% of its total revenue.

Intel, the chip giant, and its fellow companies Texas Instruments, Nvidia, Micron Technology, and Qualcomm all have huge businesses in China. Chinese companies are using their processors extensively.

And China’s rapidly growing middle class is also helping to boost the growth of some large US companies in other industries.

Take Nike, a constituent stock of the Dow, as an example. The company sold $1.2 billion worth of sports shoes and apparel in the Chinese market last quarter, accounting for 15% of its total revenue.

Another Dow component, 3M, had 10% of its sales last year from China. The company’s sales in the Chinese market increased by 16% last year, while US sales grew by only 1.5%.

General Motors earlier this year stated that in 2017 the company’s and its joint venture’s sales volume in the Chinese market exceeded 4 million units, a record high, benefiting from strong consumer demand for Cadillac and Buick brands.

Starbucks also cast a huge bet on the Chinese market and is harvesting results. The coffee giant now has about 14% of sales from the Chinese market, and its Chinese business has grown faster than the United States and other developed markets.

Gambling giants Las Vegas Sands and Wynn Resorts Group may also be harmed by China’s retaliatory actions. More than half of the revenues of the two companies come from Macau, China’s special administrative region, not Las Vegas.

Therefore, even if Trump’s original intention is to protect the interests of American workers from being harmed by Chinese competitors, many US companies are bound to suffer huge losses because of China’s retaliatory measures.