Geopolitical tension with China would hit U.S. critical technology sectors hard, new study shows
The next major financial crisis is likely to stem from further deterioration between the U.S.-China relationship
A new study by data services company J.H. Whitney reveals that escalating geopolitical tensions between the U.S. and China could severely impact the U.S. technology sector. The research shows that many top U.S. tech companies, including Meta and Tesla, are so deeply entwined with China that they might not survive a major geopolitical crisis, potentially leading to their ouster from the list of 10 largest companies by market cap. The study, which looked at 1,559 public companies in critical technology areas like biotechnology, quantum science, and artificial intelligence, found that a sudden cessation of trade relations could result in a 10% drop in U.S. GDP. John O’Connor, CEO of J.H. Whitney, suggests that the U.S. government should conduct stress tests similar to those applied to banks after the 2008 financial crisis to better understand the impact of a U.S.-China decoupling on specific companies and sectors.