U.S. Companies’ Tumbling Stocks were Not Caused by Trade War

Donald Trump
U.S. President Donald Trump arrives to deliver remarks on border security and the partial shutdown of the U.S. government in the Diplomatic Room at the White House in Washington, U.S., January 19, 2019. (Photo: REUTERS/Yuri Gripas/File Photo)

The China-U.S. trade war has affected a number of industries but a new report suggested that the decline of American companies that have been largely exposed in the Chinese market were impacted by internal issues instead of trade tensions.

According to Axios, some of the American companies that were exposed significantly in China have seen plummeting shares ever since U.S. President Donald Trump and Chinese President Xi Jinping kicked off the trade truce in December.

The report stated trade tensions did not really have an impact on the fallen stocks of Qualcomm, Micron, Qorvo, Wynn Resorts, or Skyworks. Instead, these companies went experienced the lack of demand in the semiconductor field.

Most of the mentioned tech giants are providing semiconductors across the globe. While these providers have seen significant sales in the Chinese market, the semiconductor industry has been declining on a global note.

Other consumer-focused providers have also been rising above the tech industry. These chains include Nike, which reported share increases over the past months.

The report also noted that Qualcomm already saw a fall in shares after the merger with Broadcom did not materialize. Wynn Resorts, on the other hand, has started shedding stock prices since CEO Steve Wynn resigned following allegations of sexual misconduct.

Over the past few weeks, a lot couple of mammoth companies have attributed their stock demise to the China-U.S. trade war. However, data recovered from these companies suggest that stock decline in many industries have been affected by other internal issues and loopholes, not just the trade disputes between China and the United States.

Texas Instruments executives have spoken up about the issue. CFO Rafael Lizardi said the falling shares were "mostly driven by a slowdown in semiconductors." The same story could be true for Apple, after demand for the iPhone saw a huge decrease over the past months.

Meanwhile, financial experts are looking at various reasons why the trade disputes rage on despite efforts from both China and the U.S. to reach a settlement.

A Forbes report commented that one of the likely reasons is China's fast-paced progress in technology. The United States has led the technology industry for decades but this time, it appears that Chinese companies continue to rise above the ranks.

China has also announced its plans to become a leading global technological hub. "Made in China 2025" has seen developments as early as January. Beijing has started to work on its goal to become a leader in robotics, artificial intelligence (AI), and 5G networks.

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