The trade war between the United States of America and China is, after months of negotiating, still going on with no end in sight. When the US announced to increase their import tariffs on Chinese products, it negatively affected the Chinese stock market. But not only China is the victim of this trade war. It also holds consequences for the European market.
A quarter of the European companies that have ties with China, state that they are negatively affected by the trade war that is going on. And even a small part of this group is thinking of moving their fabrics that are placed in China, elsewhere. This is, however, a small group. 10% of the companies that experience a negative impact already moved or is thinking about this. These companies mostly end up in South-east Asia or eastern Europe to avoid the high import tariffs imposed by the US. A rapport that was presented by the European Chamber of Commerce in Peking showed that 38% of the 538 participants experienced the negative impact of the trade wars. 57% of this group stated that they did not experience the direct impact of the trade wars and 4% experienced positive results.
As stated before, the Chinese stock market suffers from the high import tariffs. But the European stock market also feels the impact after president Trump put the Chinese company Huawei on the blacklist. Google even shorted Huawei’s access to their Android platform, which means that Huawei lost their direct access to updates on the Android software. European and American companies announced that their deliveries would not end up in China, resulting in suppliers losing their assignments. The Scandinavian companies Nokia and Ericson, however, both profit from the ban that is put on Huawei.
Although the increasement of the import tariffs on Chinese products do not have a direct impact on the European companies working together with China, for a big part. This might change due to the long negotiation processes and deliberations. However, the future is uncertain and there might come an end to this trade war.