While the U.S. stock market has been hit hard over an announcement Monday that China will impose retaliatory tariffs on U.S. products, it is the tech sector of American business that stands to lose the most.
The announcement from Bejing came on the heels of President Donald Trump electing to up tariffs on $200 billion of Chinese imports from 10% to 25% on Friday.
In a statement from the Chinese government, the State Council Tariff Commission will increase tariffs on 2,493 tax items to 25%; 1,078 items will see a tariff increase to 20%; 974 items will see an increase in tariffs to 10%; and 595 items will have a tariff increase of 5%.
“The (above) measures by the United States have led to an escalation of Sino-US economic and trade frictions, contrary to the consensus between China and the United States on resolving trade differences through consultations, jeopardizing the interests of both sides and not meeting the general expectations of the international community,” the statement read.
A report Monday by CNBC pointed out a stark fact: Several U.S. companies will be hit even harder the longer the tariffs and trade war continues.
Not the least of which will be big American tech firms who have a significant amount of their businesses tied up in importing or exporting goods to China for consumption.
One of the biggest losers in the recent tariff and trade war is Apple. The iPhone maker saw its stock price drop more than 3% Monday during afternoon trading.
According to U.S. News & World Report, Apple notched nearly $44.7 billion in sales to China in 2017. What’s more, since the initial introduction of tariffs by Trump, Apple stock has tumbled nearly 7%. Almost 18% of Apple’s revenue comes from China, according to CNBC.
Another big tech company that can lose out on the trade war is Intel Corp. The company accounts nearly 25% of its overall sales to the Chinese market.
On Monday, Intel stock dropped nearly 3% by afternoon trading.
But Intel and Apple are not alone in feeling the adverse effects of the recent tariffs. United Technologies also dropped by more than 4% Monday.
All three companies have experienced rises in their stock prices since the beginning of the year, but as long as the trade war continues, those gains will continue to evaporate.