Since the campaign, President Donald Trump has promised to crack down on trade deals that don’t favor American workers.
So far, it looks as if he’s delivering on his word. This week, Trump signed an Executive Order that removed the U.S. from the Trans-Pacific Partnership, a far-reaching trade deal with 11 other countries including Japan, Vietnam and Malaysia. (Trump said he is looking at making one-on-one deals with individual countries instead).
After renegotiating trade deals, another approach Trump has pledged to take is imposing increased tariffs against countries like China — possibly as high as 45 percent.
What would China do in return?
According to a report in Bloomberg, China already has contingency plans to retaliate if it’s hit with high tariffs. Those measures could include decreasing government purchases from American companies, or targeting large corporations with antidumping, antitrust or tax investigations.
Analysts with Bloomberg have also speculated that the Chinese could retaliate with widespread boycotts, which would hurt major brands like Nike Inc., General Motors Co., Ford Motor Co. and Tiffany and Co.
Decreased or more expensive trade with China would naturally also hurt American companies with the most exposure to Chinese markets. Ambarella Inc., which makes semiconductors, and Texas Instruments are the two firms in the U.S. with the most business in China. Marvell, another semiconductor maker, Genco Shipping & Trading and Diana Shipping, are the other top businesses with the most sales in China.
The Chinese companies most at risk from a trade war are mostly consumer electronics, apparel and household appliance companies.
GoerTek Inc., a wireless technology company, and Regina Miracle International Holdings, for example, receive more than 70 percent of their revenue from America. The other top Chinese companies with the highest percentage of their revenue coming from America include Li & Fung, a supply chain manager, WH Group, a meat processing company, and Lens Technology.
Many American business owners continue to lobby Trump to support trade and embrace relations with China, including the Fred Smith, the CEO of FedEx, who called America’s withdrawal from TPP “unfortunate.”
