Technology companies including semiconductor giants and iPhone maker Apple have the most to lose from further U.S.-China trade tensions as world leaders gather at the Group of 20 summit later this month, according to Citigroup.
Though Citi researchers' base case is that the two economic powerhouses will reach a "preliminary understanding" on trade at the Buenos Aires meeting, the analysts also expect President Donald Trump's administration to continue to impose more trade and investment restrictions on China.
Specifically, Citi says it's likely the White House will crack down on certain U.S. exports, with an extreme scenario including a ban on sales of U.S. semiconductor components to China. That could have an outsized impact since China is one of the largest end markets for U.S. semiconductors, generating about 30 percent of total revenue for the industry.
"The U.S. Department of Defense considers China a rising strategic competitor, and according to the U.S. Trade Representative, China has conducted industrial espionage and other market-distorting practices," Citi's Cesar Rojas and Catherine Mann wrote Tuesday. "The temporary impact on the semiconductor sector of a total ban on U.S. product to ship in to China would be devastating to the industry, as much of the largest end market products for semiconductors (PCs, cell phones, consumer electronics) are manufactured in China."