The trade of goods between the U.S. and China continued to show tensions. Last week, Treasury Secretary Janet Yellen visited China. Her visit included meetings with top Chinese Officials.
Yellen discussed the excess exports of goods from China. This includes clean energy, such as solar panels, lithium batteries, and electric vehicles. Currently, Xpeng (XPEV) sells a small number of vehicles to Norway and 250,000 units globally in 2023. BYD exported a total of 242,759 vehicles in that time.
Export restrictions for Chinese EVs would hurt XPeng, NIO, and BYD. It would benefit Tesla (TSLA). In an earnings call, Tesla CEO Elon Musk said that Chinese automakers hurt other car companies in the world.
Be wary of the solar panel industry. Firms like Canadian Solar (CSIQ) and Solaredge (SEDG) trade at multi-year lows. First Solar (FSLR) recently broke out of 52-week lows.
In the mining sector, watch for volatility in the lithium markets. Albemarle (ALB) bounced from a multiple bottom at around $115 between Nov. 2023 and March 2024. The firm would benefit if China curtailed the production of lithium.
Your Takeaway
The U.S. may impose punitive tariffs on Chinese goods. It would help the EV, battery, and solar panel markets. This would also mean the selling pressure on Chinese stocks in those industries would continue.
