Since his campaign, Trump has advocated the United States’ priority strategy and believes that the United States has been damaged in the past global trade rules. This year is the mid-term election year of the United States, and the domestic political situation is complex. Trump has made frequent trade protection policies to fulfill his campaign promise. We believe that the introduction of trade war can make the US and the global economy, including China, lose the possibility of “double lose”. But it should not be exaggerated too much, because 1) 1) the introduction of trade war is more to cope with the political aspect of the medium term selection. If it has a negative impact on American growth and prices, it will mean fire self-Immolation. 2) The complementarity of trade relations between China and the United States is greater than that of competition, and China’s own internal market is at present. As the volume grows, the dependence on foreign demand has fallen relatively; 3) China’s exports to the United States were about $430 billion in 2017, and China’s imports to the United States were about $160 billion, accounting for 19% and 8% of all China’s exports and imports, and China’s trade partners only after the EU. In the context of the intensification of Sino US trade frictions, China is expected to actively adjust its trade structure and further increase the pace of global opening up to respond positively to the negative effects of China US trade war.
What areas will the trade war have to affect?
In specific areas: 1) from the signing of the memorandum, it is the first to take 25% additional tariffs on China’s plan, especially in aerospace, information and communications technology, machinery; and 2) trade in a relatively high industry will also be affected. From the current Sino US trade structure, China’s export products to the United States are mainly mechanical equipment (according to categories mainly household appliances, electronics and other categories, total export 48%), and miscellaneous products (12%), textiles (10%), metal products (7%) and so on. American exports to China are mainly concentrated in mechanical equipment (30%, mainly capital goods), transportation equipment (20%), chemical products (10%), plastic and rubber products (5%). 3) in a positive way, China may be open to some areas to deal with Sino US trade wars in the future, including cars, medical and medical care. Finance, pension, media products and so on.
On the level of listed companies, based on factset statistics, the proportion of income from the United States in 2016 to A share / H-share non-financial industry is 5.0%/5.5%, while the US S & P 500 companies from China account for 5%. Industries from the US income account for the higher income of Chinese listed companies, including technology hardware (technology hardware, semiconductors, etc.), optional consumption (durable consumer goods and clothing, personal supplies, etc.). The medical supplies (equipment and consumables) and so on. The higher income proportion of 500 shares from China’s income accounts for S & P, including science and Technology (hardware and software), consumer goods retail, energy and raw materials.