AMERICAN COMPANIES ARE WARNING of multibillion-dollar setbacks and extreme uncertainty over the trade war with China as earnings season gets underway.<\/p>\n\n\n\n
United Airlines gave two financial forecasts, saying it\u2019s \u201cimpossible to predict\u201d whether the U.S. might slide into a recession amid the tit-for-tat tariffs.<\/p>\n\n\n\n
Johnson & Johnson CEO Joaquin Duato warned the trade war may disrupt the drug supply chain as the administration considers new tariffs on pharmaceuticals.<\/p>\n\n\n\n
Treasury Secretary Scott Bessent said in an interview with Yahoo Finance that CEOs should stop worrying.<\/p>\n\n\n\n
\u201cWe\u2019re going to have a lot more clarity on the way forward over the next 90 days,\u201d Bessent said.<\/p>\n\n\n\n
\u200aCHIPMAKERS TAKE A HIT<\/strong><\/p>\n\n\n\n U.S.-based artificial intelligence chipmakers are taking massive hits over a new Trump administration rule meant to keep China from building a supercomputer.<\/p>\n\n\n\n Nvidia\u2019s stock plunged nearly 7 percent Wednesday after the company announced it would take a $5.5 billion quarter charge tied to its chip exports to China. The California-based company revealed in a filing that the U.S. government will require it to obtain a license to export some chips due to new restrictions.<\/p>\n\n\n\n Similarly, Advanced Micro Devices said it would incur expenses of $800 million due to the new export control licensing requirements.<\/p>\n\n\n\n The Trump rule has some bipartisan support. The Hill\u2019s Miranda Nazzaro reports:<\/p>\n\n\n\n \u201cSen. Elizabeth Warren (D-Mass.), ranking member of the Senate Committee on Banking, Housing and Urban Affairs, wrote to Commerce Secretary Howard Lutnick to push for restrictions on exports of the H20 chip and others to China. She argued Nvidia\u2019s continued export of the chip will work against Trump\u2019s goal of bringing manufacturing to the United States.\u201d<\/p>\n\n\n\n The stock indices continued their recent wild swings with a drop on Wednesday, led by a tech sector sell-off.<\/p>\n\n\n\n \u200aPOWELL WARNS OF INFLATION, SLOWER GROWTH<\/strong><\/p>\n\n\n\n Federal Reserve Chairman Jerome Powell said Wednesday in a speech at the central bank that he\u2019s monitoring potential inflationary and growth pressures on the economy due to the trade war.<\/p>\n\n\n\n \u201cTariffs are highly likely to generate at least a temporary rise in inflation,\u201d Powell said.<\/p>\n\n\n\n \u201cThe level of the tariff increases announced so far is significantly larger than anticipated,\u201d he added. \u201cThe same is likely to be true of the economic effects, which will include higher inflation and slower growth.\u201d<\/p>\n\n\n\n The World Trade Organization (WTO) called the global trade war a \u201ccrisis\u201d and warned of economic disaster if \u201cthe situation deteriorates.\u201d<\/p>\n\n\n\n \u201cOur simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity,\u201d said WTO chief economist Ralph Ossa.<\/p>\n\n\n\n