Wall Street experts reportedly , are beginning to believe that the trade and economic confrontation between the United States and China is becoming protracted, and sanctions against Huawei, as well as the accompanying increase in import duties on Chinese goods, are only the beginning stages of a long "war" in the economic sphere. The S&P 500 lost 3,3% and the Dow dropped 400 points. Goldman Sachs experts are convinced that this is only the beginning, and further confrontation between the United States and China in the trade sphere will lead to a reduction in the gross national product of both countries in the next three years: by 0,5% in the case of the United States and by 0,8% in the case of China. On the scale of the largest economies in the world, these are significant funds.
Nomura experts suggest that at the G2020 summit in June, a meeting between the leaders of China and the United States may provide some stabilization of the situation, but a new stage of negotiations on trade tariffs may take place towards the end of this year. The US presidential election is scheduled for the fall of XNUMX, and as long as Donald Trump remains in power, experts see no reason for drastic changes in relations with China.
IMF officials this week issued a warning that a long economic standoff between the US and China could deprive the global market of stimulus for growth in the second half of the year, as well as destroy trade and industrial ties between the two countries. When Trump referred to the ability of the Chinese side to bear the brunt of increased customs duties, he lost sight of the fact that, so far, American importers have taken the brunt of such a situation. This week, large US retail chains said they would be forced to raise retail prices for goods imported from China if higher customs rates were applied.
The manufacturing sector will also suffer. First, the United States needs rare earths, which are used to manufacture batteries, in particular, and China has the largest reserves of them, and can, if necessary, use this vulnerability in the fight against the United States. Secondly, Apple could be the target for China's next strike. Pegatron, which produces tablets and laptops for the American market, has already announced the transfer of production to Indonesia. Apple contractors are forced to similarly protect themselves from the impact of US customs tariffs on the cost of products for this market.
Finally, many American companies are heavily dependent on the proceeds from sales of their products in China. Compiled by experts the graph, for example, points to Qualcomm (67%) and Micron (57,1%) as the most vulnerable US companies in terms of revenue share in China. Even Intel and NVIDIA received more than 20% of their revenue last year in the PRC market, and any shocks in this direction will force them to lower their revenue forecast for the second half of the year, although they did not show much optimism without this.
Source: 3dnews.ru