From a note to clients by Rosenblatt analyst Jun Zhang that landed in my inbox Friday.
With consumer electronics being one of China’s biggest export industries, we spoke with many OEMs and we believe the trade war could affect many US consumer product exports, such as TVs and home appliances. We plan to closely monitor the situation, but initially we view this as a negative for TV panel suppliers and many consumer electronics component players since it would affect smartphone and consumer electronic exports in the mid-term…
There are some scenarios that could prove how the Chinese government and OEMs could react to a US trade war:
- The Chinese government might develop a policy for the US block of a Huawei smartphone. This might potentially affect Apple (27% sales from China), Amazon (50% Kindle sales to China), movie/media industry (reduced procurement of new movie/TV shows), software /IT industry (government procurement of Microsoft and IT equipment).
- In the past, the Chinese government has attempted to find some cases to fine US players (price manipulation and market share domination).
My take: Half Amazon’s Kindle sales go to China? That would surprise me, given how many Chinese tablets compete with the Kindle. iPhones are much bigger deal.
BTW, note the contrast here between the Chinese and the Russian responses. That, in my mind, is exceedingly important looking forward.
The Chinese have much to gain by fighting global warming, which will demand technological action and products. The Russians have much to gain by permitting global warming (the opening up of literally frozen assets to their north). The result is a huge divide opening between these two Communist nations who share both a long border and very strong nationalist tendencies.
The long term result: Trump and Putin may just possibly find themselves hoisted on their own petard….
I think the world’s leaders view Trump as a loose cannon, which is what he wants. Being unpredictable gives him tremendous negotiating power.
Not being a professional politician has its advantages.