The U.S.-China trade war has erupted into a major global economic crisis, unleashing sweeping new tariffs and triggering one of the sharpest sell-offs in global stock markets since 2008. Over $5 trillion has already been wiped off global equities, and investors are scrambling to reposition ahead of what could be a prolonged period of market volatility.

This comprehensive guide covers the latest developments, which stocks are expected to drop the most, and which safe stocks could help investors weather the storm.

U.S.-China Trade War: The Latest Developments

On 5 April 2025, the United States imposed a 10% universal tariff on all imported goods. From 9 April, tariffs will escalate, with Chinese imports facing a total levy of 54%. China has retaliated with:

• 34% tariffs on all U.S. imports starting 10 April.
• Rare earth export restrictions, critical to high-tech manufacturing.
• Blacklist of 16 additional U.S. entities from key trade channels.

The European Union and the United Kingdom are also responding cautiously, but the main battle lines are clearly drawn between Washington and Beijing.

The escalation of the U.S.-China trade war is expected to dominate financial markets throughout the coming months.

Stocks Expected to Drop Sharply on Monday

The sectors most vulnerable to the new tariffs include technology, automotive, retail, banking, and steel.

Technology Sector

Apple Inc. (AAPL):
Apple’s manufacturing base in China leaves it highly exposed. Shares have already fallen 15.9% in two days. Rising costs and weaker demand in China could push Apple’s stock even lower.

Nvidia Corporation (NVDA):
Nvidia, reliant on both Chinese supply chains and customers, has dropped 7% and could suffer further declines if supply disruptions persist.

Automotive Sector

General Motors (GM) and Ford (F):
The 25% tariff on auto parts spells trouble for GM and Ford, with analysts predicting massive profit reductions. Stocks are expected to extend their declines on Monday.

Tesla Inc. (TSLA):
Despite its U.S. manufacturing base, Tesla’s stock fell 9%, driven by fears of rising production costs and weakening global demand.

Retail Sector

Amazon.com Inc. (AMZN):
Amazon’s extensive reliance on imported goods subjects it to rising costs. Its stock has already fallen and could continue to drop as tariffs squeeze margins.

Nike Inc. (NKE):
Nike’s reliance on Asian suppliers makes it vulnerable. Shares have slid 12% and are likely to remain under pressure.

Financial Sector

Major U.S. Banks (JPMorgan Chase, Citigroup, Bank of America):
Bank stocks are falling due to recession fears. With loans likely to shrink and bad debts potentially rising, the sector is bracing for more pain.

Steel Industry

U.S. Steel Companies (Nucor, U.S. Steel):
Rather than benefiting from protectionist policies, steel stocks have tumbled as fears of reduced industrial demand outweigh the advantages of tariffs.

Safe Stocks to Watch During the U.S.-China Trade War

While some stocks are collapsing, others are seen as safer bets during the U.S.-China trade war. Defensive sectors like utilities, healthcare, consumer staples, and gold miners are drawing investor interest.

Utilities

NextEra Energy (NEE):
With its regulated utility business and renewable energy focus, NextEra Energy offers predictable cash flows and low exposure to trade disruptions.

Duke Energy (DUK):
Duke Energy’s stable earnings and dividend reliability make it a classic defensive play.

Consumer Staples

Procter & Gamble (PG):
Procter & Gamble’s portfolio of essential consumer brands allows it to maintain steady revenues even during economic downturns.

Coca-Cola (KO):
Demand for beverages remains stable in any environment. Coca-Cola’s global presence makes it a resilient investment.

Walmart (WMT):
Walmart’s massive scale and cost leadership help it navigate supply chain disruptions better than smaller retailers.

Healthcare

Johnson & Johnson (JNJ):
With a diversified healthcare business, Johnson & Johnson is well positioned to perform during economic uncertainties.

Pfizer (PFE):
Pfizer’s pharmaceutical strength and pipeline make it attractive to investors seeking stability.

UnitedHealth Group (UNH):
As the largest U.S. health insurer, UnitedHealth benefits from steady demand for healthcare services.

Gold and Precious Metals

Newmont Corporation (NEM):
Gold is a traditional hedge against volatility. Newmont, the world’s largest gold miner, could benefit from rising gold prices.

Barrick Gold (GOLD):
Another leading miner, Barrick Gold stands to gain if the safe-haven rush into precious metals continues.

Global Market Outlook

• The Nasdaq Composite has entered a bear market, falling over 20% from recent highs.
• The S&P 500 and Dow Jones Industrial Average are poised to open sharply lower.
• European and Asian markets are preparing for heavy losses as well.

Investors should expect further volatility and consider defensive strategies to mitigate risk.

Conclusion

The U.S.-China trade war has unleashed widespread financial market turmoil. While companies like Apple, Nvidia, GM, Ford, Amazon, and Nike face severe challenges, safe sectors such as utilities, consumer staples, healthcare, and gold offer potential shelter.

Careful portfolio rebalancing towards resilient sectors and reduced exposure to trade-sensitive industries could help investors navigate this unpredictable environment. By focusing on defensive stocks, diversification, and quality, market participants can better weather the storm.

Frequently Asked Questions

What is the U.S.-China trade war?
The U.S.-China trade war refers to the ongoing economic conflict between the United States and China, involving tariffs, trade barriers, and retaliatory measures that affect global trade and financial markets.

Which stocks are most affected by the U.S.-China trade war?
Technology, automotive, and retail stocks are among the most affected. Companies like Apple, Tesla, Amazon, and Nike face rising costs, supply chain disruptions, and declining demand due to escalating tariffs.

What are safe stocks during a trade war?
Safe stocks during a trade war typically include companies in the utilities, healthcare, consumer staples, and gold mining sectors. Examples are Procter & Gamble, Coca-Cola, NextEra Energy, Johnson & Johnson, and Newmont Corporation.

How does the U.S.-China trade war impact global markets?
The U.S.-China trade war increases market volatility, triggers sell-offs in sensitive sectors, raises production costs, and slows global economic growth, leading to broader financial instability worldwide.

How can investors protect their portfolios during the U.S.-China trade war?
Investors can protect their portfolios by diversifying across defensive sectors, reducing exposure to heavily trade-dependent industries, and focusing on companies with strong balance sheets and stable earnings.

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