Washington: A sharp drop in Chinese economic growth will hit the profits of US firms but Apple iPhone sales should recover once Washington strikes a trade deal with China, a senior White House adviser said on Thursday.
“If we have a successful negotiation with China, then Apple’s sales and everybody else’s sales will recover," Kevin Hassett, chairman of the council of economic advisers at the White House, said in an interview with CNN.
Hassett said Asian economies including that of China have been slowing quite a bit since last spring and that China is “feeling the blow" of US tariffs.
“That is having an impact on earnings and it’s not going to be just Apple," Hassett said. “I think there are a heck of a lot of US companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until you know we get a deal with China."
Apple’s warning on Wednesday about weak iPhone demand in the holiday quarter was a gloomy omen for Wall Street bulls hoping for an early gift in 2019 following December’s steep selloff.
Factory activity weakened across much of Europe and Asia in December as the US-China trade war and a slowdown in demand hit production in many economies, offering little reason for optimism as the new year begins.