China is increasing the number of U.S. companies it won’t export certain goods to as its ongoing trade war with the country heats up. 28 U.S. companies have been added to China’s export control list, which is essentially a ban list. The latest control list update also includes dual-use items.
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China is taking these actions to “safeguard national security and interests.” As such, many companies included in its ban are in the defense sector. A few examples include General Dynamics (GD), Lockheed Martin (LMT), RTX’s (RTX) Raytheon Missiles & Defense, and Boeing’s (BA) Defense division.
How Trump Will Affect Relations with China
President-elect Donald Trump will take the White House this month and with that comes more fuel for the trade war. His playbook includes heavy tariffs on goods from China, signaling that the trade war will unlikely end anytime soon.
While Trump’s actions may be a severe move against China, they aren’t without support. Trump may have started the trade war with China during his first term, but President Joe Biden continued it during his White House tenure. This shows that the trade war with China has bipartisan support. Even if there are arguments about Trump’s tariff plan.
Adding to this are American companies dropping support for China. Many argued against tariffs on China during Trump’s first term, but have since scaled back operations there. This comes as China’s economy continues to falter, causing U.S. businesses to seek out customers elsewhere.
How to Avoid Trade War Losses
An ongoing trade war could weigh on the stock market. That’s especially true for companies that do business with China. To better weather the economic conflict, traders might shore up their holdings in service stocks. These are more resilient to the trade war with China as they don’t rely on the country for goods. A few examples worth considering are McDonald’s (MCD), Netflix (NFLX), Mastercard (MA), Visa (V), and Verizon Communications (VZ).
