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Trump's favorite caterpillar will be hit by a trade war Mar 25, 2018

U.S. stocks plunged in recent days as Trump announced that it was considering tariffs to reduce U.S. trade deficits to China by $100 billion trillion, raising fears of a potential trade war. U.S. analysts say the "trade war" could have an impact on Boeing. Nyse:cat, another company Trump likes, is expected to receive the same treatment.

As with Boeing, Caterpillar is a big metal user in the United States, and business growth depends on strong demand in the Chinese market. Trump once said: "God bless Boeing, I like Caterpillar."

Earlier, Caterpillar (CAT) expected sales growth in construction operations in 2018, partly because of strong demand in China, at least for the first half of the year.

As early as 1975, Caterpillar entered China as the first foreign-funded construction machinery company in China, and was the first to establish a manufacturing base in China, to set up research and development centers, to introduce a network of agents, and the first to establish a capital leasing corporation in China, a logistics center and a remanufacturing engineering machinery enterprise. Caterpillar has played an important role in the implementation of Caterpillar China strategy, the introduction of new products, the promotion of market share and the export of products in the Xuzhou factory. At present, Caterpillar has more than 20 factories and more than 350 suppliers in China.

Caterpillar Global vice President Qihua, Caterpillar (China) Investment Co., Ltd., said that after more than 40 years of development, the Chinese market has long been an integral part of Caterpillar's global market.

If tensions escalate, China, which invests heavily in the "All Along" infrastructure initiative, could shift more business to local manufacturers, such as 31 heavy industries or Zoomlion. Caterpillar's share price fell 0.75% per cent in Wednesday, at $152.54 trillion, with shares falling more than 5% per cent in nearly three trading days.