The White House on Thursday warned that more U.S. companies should expect to see their earnings projections take a hit as long as trade tensions with China continue.
“It’s not going to be just Apple,” top White House economist Kevin Hassett told CNN. “I think that there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China.”
The stock market dropped sharply on Thursday after Apple lowered earnings projections for the first-quarter of 2019 amid the Trump administration’s quarrels with China and lower iPhone sales. The Dow Jones fell 677 points over fears of more companies following suit, but recovered some ground later in the day.
“Trade tensions between the United States and China put additional pressure on the economy,” Apple CEO Tim Cook said on CNBC.
China is also feeling the sting of stiff U.S. economic sanctions, Hassett said.
“Right now, China is feeling the blow of our tariffs,” the White House economist said. “That puts a lot of pressure on China to make a deal. I think everybody recognizes the seriousness of the situation.”
China accused the U.S. in July of starting “the biggest trade war in economic history.” The Trump administration has to date levied tariffs on $250 billion worth of Chinese products, and China has retaliated with tariffs on $110 billion in U.S. goods.