🎯 Trade War: Intel at risk

Welcome back to another issue of Trendline!

China has hit back on US, with total tariffs of 125% on US goods. This was in response to US putting a total fo 145% tariffs on Chinese imports. The trade war is well and truly on!

In today’s post, we look at some major US companies and how tariffs may impact sales for these companies. Let’s dive in 👇️ 

1) Intel: This chart highlights Intel’s significant exposure to China’s new 125% tariffs on U.S. imports. In 2024, 29% of Intel’s revenue came from Chinese customers, yet a large share of its chip manufacturing is still based in the U.S. (Arizona, New Mexico, Oregon). This means products sold in China are now subject to steep import duties, putting a major portion of Intel’s business at risk unless it can shift manufacturing or find tariff workarounds.

2) Tesla: Tesla has ~21% of revenue coming from China. It has a gigafactory in Shanghai where it manufactures Model 3 and Y and sells it locally.

Model S and Model X however, are imported from its US factores and sold in China. These models will be hit by tariffs, making them uncompetitive - the company has reportedly already stopped taking orders from Chinese customers for these two models.

Strategically, Tesla may have to increase local production in China, if it wants to continue selling in the world’s largest EV market. Ironically, the tariff war will “increase production” in China in this specific case.

3) Apple: Apple gets 16% of revenue from China and 43% of revenue from Americas (majority US). However, Apple does not manufacture any products in US - so there is nothing to tariff there. Instead it primarily manufactures products in China, and sells in US and other countries. So 145% tariff imposed on Chinese goods will raise prices for American customers while nothing changes for Chinese customers. This severly impacts Apple since US is its biggest market.

Note this doesn’t account for other challenges Apple might face, e.g. rising anti-US sentiment in China.

4) Nike: Similar story as Apple, Nike mainly manufactures its products in China and other asian countries like Vietnam. High tariffs imposed on goods from these countries will raise prices of these goods for US customers, risking majority of the 44% revenue Nike earns in US. However, Chinese customers can still access Nike goods manufactured locally in China or other Asian countries like before.

5) Nvidia: Nvidia’s case is very interesting. Nvidia designs its chips in US, but unlike other competitors like Intel, outsources its manufacturing to TSMC in Taiwan. Hence its insulated from tariffs imposed from both US and China (since manufacturing is done in Taiwan). Nevertheless, it can still be impacted indirectly due to slowdown experienced by its major customers like Meta.