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An upsurge in the possibility of a trade war might hit the stock market unprecedentedly. According to UBS group experts, the companies which might have to undergo maximum losses in case of a trade war are already faring badly. Experts have predicted that that total stock market could undergo a loss of 20 percent.

If at all a trade war takes place, one of the most affected companies will be Micron, firstly because it is a semiconductor company and secondly, owing to their direct dealings with China while Nike being a functional brand, dealing with merchandise and apparel, will be less affected than small retailers which cannot raise prices independently. In the time of a trade war, all the companies will have to cut their costs.

A global full-fledged trade war might happen if the U.S. and China will compete with each other by slapping higher and higher prices, the price of goods in both the countries will break down and development could come to a standstill.

China has claimed to apply tariffs on the U.S. goods worth $60 billion in retaliation to the step taken by the U.S to put tariffs on China worth $200 billion. Since tariffs affect particular products, so it could affect every industry differently. Where hardware companies could do away with transferring 50 percent of the tariff cost to the customers, merchandise companies will not be able to transfer as much cost.

Analysts, however, say that there is not an imminent possibility of a trade war. They advised the investors to concentrate on the places from which companies obtain their goods. Doing so will enable the companies who can enlarge their boundaries, to shift the supply chain elsewhere so that maximum damage can be prevented.

Semiconductor companies can take damage repair steps of manufacturing within the country and hence be doing away with import. Other companies may adjust their supply chains to avoid Chinese goods.