The United States and China are engaged in a trade war. According to Fortune, these three U.S. companies are most at risk for financial losses: Boeing, Starbucks, and Westinghouse. Here is how the fate of these companies is dependent on successful relations with China.
In the recent interview with CNN, the CEO of Boeing, Dennis Muilenburg, stated grave concerns for the escalating U.S.-China trade war. Muilenburg states that with approximately 43,000 airplanes needed in the next twenty years, the aerospace business is one of the world’s most solid growth industries.
Boeing is “…the United States’ largest exporter and is juggling national security contracts with the US government, building rockets for NASA, and delivering aircraft all over the globe.” Needless to say, the success of Boeing is very much a part of the success of the U.S.
China is estimated to spend $1.1 trillion on airplanes over the next twenty years and Boeing insists that it’s in America’s best interest to build on relations rather than engage in tariffs.
The United States and China are Starbucks’ two biggest markets. Last year, China was seeing record growth in Starbucks’ product consumption. By some accounts, it looks like Starbucks is on pace to outspend the U.S. market.
With the tariffs imposed on China, there is a strong argument that Chinese citizens could boycott American products and Starbucks is among the most recognizable. With Starbucks having a large investment in this market, the trade wars may put the company at significant risk.
Founded in the United States in 1886, Westinghouse Electric Co. filed for bankruptcy in 2017 but is regaining strength in the Chinese market. China, pushing to become a strong player in the nuclear power market, has been working with Westinghouse on a nuclear reactor project despite the bankruptcy.
Westinghouse is the United States largest producer of nuclear fuel, but the company, having no U.S. source of zirconium, relies on China.
The company said that tariffs would “raise the cost for Westinghouse to manufacture nuclear fuel for U.S. commercial nuclear power plants” and it ultimately “would increase the cost of electricity to a significant percentage of U.S. electricity consumers.”
The fate of U.S. businesses hangs in the balance as the trade war continues. The only guarantee is that one side will come out ahead.