U.S. companies' China exposure as Trump escalates trade war

By Noel Randewich
Aug 23 (Reuters) - President Donald Trump said on Friday he
was ordering U.S. companies to look at ways to close their
operations in China and make more of their products in the
United States, a rhetorical strike at Beijing as trade tensions
Trump cannot legally compel U.S. companies to abandon China
and he gave no details on how he might proceed with any such
For many products sold in the United States, there are few
alternatives to Chinese production, and shifting production for
major goods produced there could take years and be expensive.
The following table shows the U.S. S&P 500 companies with
the greatest revenue exposure to China, most of which are
chipmakers. The list is based on a Refinitiv model that uses
company filings where possible and on estimates where no
company-reported data is available:

Company Estimated China Friday stock
Revenue Exposure move
Wynn Resorts 75% -3.8%
Qualcomm Inc 67% -3.2%
Micron Technology 57% -4.2%
Qorvo Inc 57% -3.4%
Broadcom Inc 49% -4.7%
IPG Photonics 43% -5.2%
Advanced Micro Devices 39% -5.6%

Maxim Integrated Products 35% -3.0%
A. O. Smith Corp 34% -2.4%
Amphenol Corp 32% -1.8%

In a series of tweets on Friday, Trump also said he was
ordering carriers including FedEx, United Parcel Service
and retailer Amazon to refuse deliveries from
China of fentanyl, a synthetic opioid. Trump has accused China
of failing to meet promises to stem a deluge of fentanyl into
the United States

Company Estimated China Friday stock
Revenue Exposure move
FedEx Corp 7% -3.6%
United Parcel Service Inc 5% -3.4%

Trump's widening trade war and China's slowing economic
expansion have hurt several other U.S. companies that in recent
years have relied on the world's second largest economy to drive
their sales growth:
** Apple relies on China for about 17% of its revenue and
manufactures its iPhones and other products in China. Its stock
dropped 4.5% on Friday after Trump's newest tweets.
** Detroit automakers General Motors Co and Ford
Motor Co cut their full-year profit forecasts due to
escalating tariffs
** Caterpillar Inc recently said tariffs on Chinese
imports are expected to increase its material costs by up to
$200 million in the second half of 2019. The heavy machinery
maker plans to offset most of the higher costs with mid-year
price hikes.
** Boeing Co on Aug. 8 said it is concerned about the
impact of possible trade tariffs on the cost of running its
supply chain, but has not yet seen any impact from U.S.-Chinese
trade tensions on its business.
** General Electric Co estimated that new tariffs on
its imports from China could raise its costs by up to $400
million overall, before steps to lessen the impact
** Consumer products maker Newell Brands Inc said
the annualized impact of tariffs could be as much as $100

(Reporting by Noel Randewich
Editing by Alden Bentley and Paul Simao)

2019-08-23 21:24:14

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