Apple shed 7 percent postmarket. Shares of semiconductor stocks fell after the announcement. Industrial giant Caterpillar, which draws a substantial amount of business from the Asia Pacific region, also saw its shares fall 3 percent in after-hours trade.
The tech executive’s comments come amid ongoing trade disputes between the Washington and Beijing governments. While the two countries temporarily agreed in early December to pause tariff escalations, headlines about the ongoing negotiations have continued to send jitters through the market. Prior to that agreement, China and the U.S. had gone back and forth threatening to implement tariffs on billions of dollars worth of imports.
U.S. stock futures fell late Wednesday following Cook’s letter.
Many business leaders have said an extended U.S.-China trade war would negatively impact business, or at the very least reduce visibility.
Apple previously sent a letter to U.S. Trade Representative Robert Lighthizer saying President Donald Trump’s proposed tariffs on China would affect a number of its products, increasing costs for consumers.
“It is difficult to see how tariffs that hurt U.S. companies and U.S. consumers will advance the Government’s objectives with respect to China’s technology policies,” Apple said in the September letter. “We hope, instead, that you will reconsider these measures and work to find other, more effective solutions that leave the U.S. economy and U.S. consumer stronger and healthier than ever before.”
In December, FedEx CEO Frederick Smith said “most of the issues that we’re dealing with today are induced by bad political choices.” He listed China as one of the company’s global concerns.
Alibaba founder Jack Ma previously said the frictions could last for two decades and would be “a mess” for all parties involved. Dell CEO Michael Dell told CNBC in July that the U.S. and China face a “mutually assured destruction” if trade relations collapse, adding that “no one will win” a trade war.
General Motors mentioned uncertainty around China in the bleak picture of the global economy described in talking points distributed to managers in October as the automaker offered buyouts to 17,700 employees.
“We cannot afford to wait and see what happens in the industry, or with China, or in international trade or currency, to then react,” the severance document said. “Even if macro-economic factors are partially to blame, continuing to lower guidance to Wall Street is not an option.”
But not every company is pessimistic about its future in China.