Posted on 05/11/2019 4:38:48 AM PDT by cba123
As uncertainty over the outcome of Sino-American trade talks grows, so does the possibility of longer-than-expected negotiations or an all-out trade war.
The Trump administration has laid the groundwork to unexpectedly increase duties on $200 billion in Chinese imports to 25% from 10% at 12:01 a.m. Eastern Time on Friday. That escalation has prompted strategists at Goldman Sachs to offer some timely trading strategies, if trade negotiations, set to kick off on Thursday, break down.
(not sure I agree with the suggestions, but might be worth discussing, anyway)
Please see link for full article.
(Excerpt) Read more at marketwatch.com ...
"The investment bank’s analysts, led by chief equity strategist David Kostin, are recommending that investors target services firms, which they describe as less exposed to trade policy (including retaliatory moves) and have better corporate fundamentals, as a group that could help to insulate investors from tariff-fueled volatility."
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I think it would make sense to bet on American production for a change.
But that is just me...
1) Apple Inc. AAPL down -1.39% but gained nearly 30% this year
2) Johnson & Johnson JNJ, +0.23% up 8.8%.
3) Alphabet Inc. GOOG, +0.16% GOOGL, -0.03% class A and C shares are up by about 13%
4) Microsoft Corp. MSFT, +1.30% up 24%
5) Amazon.com Inc. AMZN, -0.52% up 28.4%
Why not help the American Co. now doing business in China either move to more business friendly (less likely to steal technology and require a partnership) such as Vietnam, S Korea, etc.
Perhaps low cost loans to build necessary infrastructure, tax incentives and the like. Ideally we would like to see them come back here but with high cost of labor here they could, at present, not be price competitive with mfg overseas.
If tariffs were so high that imports from China to the U.S. dropped to zero, SOME manufacturing capacity would migrate to the U.S. The vast majority of it would simply relocate to other Asian countries like Vietnam and Cambodia.
My tail will probably fall off anyway...
Unexpectedly?
Really? He's only been talking about this tariff action for the past year, and this whole month really emphasizing it would happen if no agreement was reached.
I think the media says things like this to make Trump look wild and uncontrolled, when he's anything BUT.
Promises made, promises kept.
[If tariffs were so high that imports from China to the U.S. dropped to zero, SOME manufacturing capacity would migrate to the U.S. The vast majority of it would simply relocate to other Asian countries like Vietnam and Cambodia.]
Nokia was extorted for hundreds of millions of dollars after building a plant in India. The Indian tax authorities expected to be paid a cut of Nokia’s worldwide corporate profits, even though the plant was basically an assembly operation. Nokia settled to retain access to the Indian market, but this kind of shakedown is precisely yet another reason companies like Apple build products through subcontractors - that way the host government housing the plant that builds Apple’s products, not to mention the plant’s employees, has no claim on Apple’s profits. Nonetheless, I wouldn’t put it past India to try shaking Apple down anyway. That’s why if Foxconn builds in India, it would be wise to do so only for Apple products sold in India.
They are wrong. American manufacturers are the ones that will be growing, thanks to Trump.
There will not be an all-out U.S.-China trade war.
Yes, unexpectedly; “they” didn’t think he would do it. SOP has been for US negotiators to fold their full-house hand against a pair of deuces. We’ve done that for decades.
American made chopsticks might be a good investment.
what do they mean “if”?
No manufacturer in their right mind will invest hundreds of millions of dollars to rebuild industries like textiles, consumer electronics, and the like from scratch in the U.S. if the profitability of those factories is completely dependent on tariffs which can be revoked by the President or Congress on a whim. Far more profitable to continue to import regardless of tariff and pass the cost on to the consumers.
There will be consequences to the Chinese as companies end production there and move it to low/no tariff countries.
Better than putting all your eggs in one basket.
I agree - services has become big but nothing beats actually making stuff.
They don’t understand that this is not a two party “war”. China lives and dies by being the low cost provider, using cheap labor. Slap a tariff on them and they are no longer the low cost provider. There are lots of low cost labor countries that would like to take over China’s position. The U.S. mostly sells what others don’t have to sell.
I don’t think an all out trade war will happen, but I’ll play along.
1) US Steel (current p/e below 3)
2) Kraft/Heinz (Traditional go-to in hard times currently out of favor)
thanx for this info
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