Courtesy of Pam Martens.
According to the Office of the U.S. Trade Representative, “China was the United States’ 3rd largest goods export market in 2013.” That’s the latest year that data is available. The total of U.S. exports to China in 2013 reached $122.1 billion, a 10.4 percent increase over 2012.
The top categories of goods that we export to China are: agricultural products, $25.9 billion; aircraft, $12.6 billion; machinery, $12.2 billion; electrical machinery, $11.4 billion; and vehicles, $10.3 billion.
According to a March report from FactSet, “companies in the S&P 500 in aggregate generate about 10 percent of sales from the Asia Pacific region, most of which comes from China and Japan.”
On Monday, China’s Shanghai Composite Index fell 8.48 percent (it was off another 1.7 percent at the close on Tuesday, closing at 3,663). From a June 12 high of 5,166, the Shanghai Composite is now off 29 percent in less than two months and the roller coaster ride which had seen as much as $4 trillion in investor losses earlier this month is spilling over into U.S. markets. Many S&P 500 stocks have far greater sales exposure to China than 10 percent.
According to Sue Chang, a MarketWatch reporter using data from FactSet, 52 percent of Yum Brands sales come from China; Qualcomm derives 48 percent; Micron Technology 40 percent; and Texas Instruments 32 percent.
Along with the troubles in China, the U.S. economy is facing a rash of equally serious headwinds. Canada has now entered a technical recession with two back to back quarters of contraction this year. Canada is the number one export market for U.S. goods, buying $312 billion from the U.S. in 2014 or 19.2 percent of all U.S. exports.
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