Shortly? At the end of the text, there is a summary.
Not long ago Donald Trump had something to celebrate. It turns out that the import tariffs of the Chinese economy are "really hurting," the US president said last August, expressing persistence to his beaten peasants: "We win, but we have to be strong," he tweeted.
Only half a year later, the White House is much smaller. Negotiations in the trade dispute with Beijing have resumed and both sides are constructive. "Negotiations with China are going very well," Trump commented peacefully last week.
Behind the conciliatory notes is likely to be a loss event that did not occur in commercial opponents, but at home in the United States: As Apple revised its sales forecasts because of weakening iPhone sales, there is a fear of markets in the future . "Apple shook markets with China's alert, who will be next?" Asked Wall Street Journal worried.
Companies report problems in China's business
In fact, in recent months, several US companies have sounded an alarm over business in China.
- Mattel, maker of Barbie, warned in October that "we see a slowdown in our business in China." Only an unexpected good sale of fashion dolls in the United States has made up for the losses for now.
- At Tiffany, the slowdown in Chinese tourist consumption in the US and Hong Kong contributed to disappointing sales in the third quarter.
- The Californian wine industry saw a 15% decline in exports to China in the first ten months of 2018.
- The Ford car company sold in China by November 30 less than the previous year. In November alone, sales fell 50%.
GM reported a 15 percent decline in its sales in China in the third quarter.
- Tesla, which is building a new factory near Shanghai, has cut prices for some of its models to keep customers away.
- The FedEx logistics group revised its profit expectations to 2019 down as world trade had weakened.
Still, they are individual messages, but they fit together to form an image that displeases investors. Investment bank Barclays reduced its S & P 500 earnings forecast to 2019 from 17 to 16, saying prospects for the global economy deteriorated, mainly due to the slowdown in China. The IMF reduced its growth forecast for the country from 6.4 to 6.2 percent in 2019, the lowest rate since the early 1990s.
For misery, Trump is not the only responsibility, even if the IMF refers to the "negative consequences of recent customs actions." Beijing has problems at home, a huge debt of companies. But Trump's punitive rates are increasing the burden on the economy, and the fear of escalation is depressing not only the brokers but also the consumer. In November, Chinese retail sales rose as low as 15 years.
This reluctance to buy into the fastest-growing consumer market in the world also affects many US corporations, although the United States economy as a whole is less vulnerable than other economies thanks to the huge single market. More than eight percent of goods and services exported by US companies go to China. E: From 2000 to 2018, these exports increased by 530%.
So while Trump is at war with exporters in China, the world factory has long since become a department store in the world – and the shelves are also supplied by manufacturers in California, Michigan or Pennsylvania. And so his campaign brought the man in the White House a first Pyrrhic victory: in December, China's exports to the US fell 3.5 percent – but imports shrank 35.8 percent at the same time. The result: the largest bilateral surplus in China since the beginning of 2016.
Industry particularly exposed
The China Blues will not just hit Apple. "There will be more," predicts Stephanie Link, of investment company Nuveen, on CNBC. Still, most companies did not publish quarterly results. But analysts have begun to identify the weak on the train, which, like Apple, generates a significant proportion of its sales in Asia.
So, China is the world's largest semiconductor market. Corporations like Intel, Qualcomm and Texas Instruments, which account for nearly half of China's third-quarter revenue, are under more scrutiny.
The technology industry is particularly exposed. According to investment bank Barclays, technology shares of the S & P 500 index reached 60% of its sales in international markets, double the average of all stocks. However, the downturn affects not only exporters, but also those that produce locally.
Recommendation for Starbucks lowered
Many American companies have their hopes built on China's rocket rocket. GM already sells more cars in China today than it does in North America. For Starbucks, which is already serving its coffee in 3600 locations, China is likely to become the largest market before the United States. A scenario that triggers an alarm: Goldman Sachs downgraded the coffee chain's stock recommendation.
Aircraft manufacturer Boeing expects China to order about 8,000 jets, worth more than $ 1 trillion by 2036. Westinghouse, which filed for bankruptcy in 2017, hopes that China's reactors business will give it a bright new future.
Whether these forecasts can be maintained remains to be seen. Like Apple, one or another group may be tempted to attach its own trade failure to economic development. Cooling in China gives it the "coverage" needed, argues Dan Clifton of the Strategas Research financial council.
Trump seems less relaxed
So Ford had a problem in China long before the economy started spinning. And others show that you can succeed in adverse circumstances. The Nike shoemaker increased its sales in China in the quarter to the end of November by 26%. The weakened region was the best.
The White House has decided to defend forwards. "It will not just be Apple," said Kevin Hassett, chief economist. "Many US companies selling in China will see their sales expectations lowered next year until we have an agreement with China." After that, says the Trump consultant calmly, sales would return to normal again.
The president himself, however, does not seem more relaxed. In the fall, he only "talked about tariffs, tariffs, customs duties," said stockist Clifton CNBC. But then, suddenly, he began to delirious with a "large amount."
Maybe Trump has made it clear that his strategy is backfiring.
In summary: With its customs policy, US President Trump wanted to prevent China from advancing in the United States. At least after the Apple sales alert, which takes the company back to problems in the Chinese market, this shows that Trump instigated the trade boomerang dispute for many American companies. Not only car manufacturers such as Ford and Tesla are affected, but also the chain of Starbucks coffee shops, for example. Although some of the companies have had problems before China weakened, Trump has become stingy – and now it's in talks.
Note: In an earlier version, the aircraft maker Boeing expects China to order about 8,000 jets worth more than $ 1 billion by 2036. In fact, it is more than a trillion dollars. The corresponding position has been corrected.