Here’s What European Companies Are Saying About the Trade War

(Bloomberg) -- There have been glimmers of hope this week regarding the U.S.-China trade dispute, with American officials headed to Shanghai on Monday for talks, and Beijing approving the import of some U.S. agricultural products.

Those developments might provide some comfort to the long list of companies that find themselves in the tariff firing line, as the breakdown in Sino-U.S. relations disrupts their businesses.

Many European companies used their first-half earnings announcements this week to bemoan the impact of the saga. Below we look at what’s been said over the past five days.

Industrials

Anglo American Plc

• Average nickel prices have decreased amid subdued market sentiment, predominantly related to the U.S.-China trade dispute, the U.K.-listed mining giant said.
• That’s more than offsetting the positive effects of solid stainless-steel production and strong battery growth.
• It also said demand for rough diamonds in the first half continued to be hampered by U.S.-China trade tensions, as well as recent Hong Kong protests and a stronger dollar.

Norsk Hydro ASA

• The trade war will have a lasting negative effect on aluminum consumption, Chief Executive Officer Hilde Merete Aasheimtold Bloomberg on Thursday, as the company trimmed its demand growth forecast for a second time this year.
• “With the turmoil that’s going on now, it’s hard to see how it will play out,” the boss of the giant aluminum producer added.

Petra Diamonds Ltd.

• Echoing Anglo’s sentiment, Petra said in a trading update that the diamond market remains difficult, with tensions between the U.S. and China a headwind that weighed on rough sales and pricing during its most recent half-year.

BASF SE

• “The global trade conflicts, particularly between the United States and China, are a serious concern for the company,” the German chemicals giant said Thursday as it reiterated its reduced guidance from July 8.
• The warning a few weeks ago -- that slowing industries and the trade war threaten to cut profit by 30% this year -- sent ripples through numerous markets.

Croda International Plc

• Demand for ingredients used in cosmetics and other personal-care products slowed in both the U.S. and China, where the trade war has created significant uncertainty, weighing heavily on consumer confidence, the chemicals group said at its interim results.
• Customers cut inventories due to the uncertain tariff situation, while China’s new legislation restricting so-called Daigou cross-border selling affected some local customers.

READ: What’s ‘Daigou’ and What’s It to Gucci and Beijing?

Tech

IQE Plc

• Supply chains are being redeveloped across the globe because of the trade dispute between the U.S. and China, the Welsh chipmaker warned.
• That’s had an impact on sales volumes for IQE’s semiconductors, as global customers adjust, it added.

Nokia

• Risks remain in the year, including trade-related uncertainty and challenges in the China market, according to the Finnish network-equipment maker.

Consumer

Royal Philips NV

• Dutch consumer health and medical technology company is shifting production to China and strengthening local supply chains as an antidote to the trade war.
• It’s bracing for an additional 20 million-euro ($22.3 million) burden when the next batch of announced tariffs come into force, and will switch some production locations as a result.
• The company had produced all its respiratory masks in China, but will soon begin making them in the Americas as well. It will produce more ultrasound equipment in China to meet demand there, sidestepping tariffs.

Joules Group Plc

• The country-style clothing and homeware retailer is “carefully monitoring the development of U.S.-China trade negotiations,” it said.
• The company is looking at alternative sources for its products to mitigate against increases in U.S. tariffs on goods made in China.

Recruitment

Robert Walters Plc

• Brexit, trade wars, the Yellow Vest protests in France and political unrest in Hong Kong are disrupting client and candidate confidence, the recruitment company said.
• Mainland China, despite trade tariff concerns, delivered growth in both net fee income and operating profit.
• Robert Walters’ warning was in line with comments from peer Pagegroup Plc, which said July 10 that confidence in China had been hit by tariff uncertainty.

Next Week

• German carmaker BMW AG and Italian parts firm Pirelli SpA report earnings on Thursday. The auto industry has been one of the sectors hit hardest by the trade war this year.
• Consumer-goods giant Reckitt Benckiser Group Plc reports first-half results on Tuesday after warning in its annual report in April that tariffs and trade sanctions could hurt its supply chain.
• Germany’s Dialog Semiconductor Plc on Tuesday and Infineon Technologies AG on Thursday are among the chip-makers that could comment on trade next week. All eyes will be on Apple Inc. in the U.S., however, which reports third-quarter earnings on Tuesday.

To contact the reporters on this story: Joe Easton in London at jeaston7@bloomberg.net;Penny Peng in London at ppeng18@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Phil Serafino, Paul Jarvis

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