China's Retaliation Puts These ETFs And Stocks In Focus

The renewed trade jitters resulted in a tailspin in the global stock market, more specifically across Wall Street. China is seeking to impose as much as 25% tariff on $60 billion worth of U.S. imports effective June 1 in retaliation against Donald Trump’s tariff increase to 25% from 10% on $200 billion worth of Chinese goods effective May 10.

The second-largest country has slapped a duty on around 5,140 products with waivers to some companies from the tariff increase, which could range between 5% and 25%. Products that will face 25% tariff include food products such as meat, honey, bamboo, frozen peas and spinach, roasted coffee, green teas, various oils, fruit juice and stuffed pasta; drinks such as beer, wine and gin; building materials such as building stone, bricks, panels, floor tiles, and pipes and tubes; and manufacturing equipment such as vacuum molding, wire-drawing and cable-making machines.

On the consumer side, televisions, headphones, DVD players, cameras, telescopes, alarm clocks, instruments such as pianos, buttons, and fishing rods are now also on the list of higher tariffs.

The rise in trade tariff war will add to the woes of already slowing economic growth. According to Klaus Baader of Societe Generale, if current U.S. measures and those likely to be taken by China remain in place, GDP can be expected to be hit to the tune of 0.5% in China, 0.25% in the United States, and 0.15% globally. If America levies tariffs on all Chinese goods and China retaliates, these losses could easily double. Per Morgan Stanley, the potential cost headwinds of 25% tariffs on all Chinese exports to the United States could be in the range of 1.0-1.5% of the index’s net income.

Given this, we have highlighted several ETFs and stocks that were hit hard by new tariffs and will be in focus in the weeks ahead:

Apple Inc. (AAPL - Free Report)

Apple is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. iPhones and other products are subject to higher tariff of 25% that will dent demand and profits. Additionally, sales are expected to slow down in China on spiraling trade war. As such, shares of Apple dropped 5.8% — its biggest drop of the year — on the day. In fact, the iPhone maker has lost around 12% of its market value since Trump threatened to impose additional tariffs on May 5. The stock currently has a Zacks Rank #3 (Hold) and has a VGM Score of A.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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