Global Industries’ Hedge Strategy Under China-US Trade War

Abstract

Human use trade to develop economy and technology til nowadays.Trade would benefit both parties but trade war is a movement that not worth for both parties. China-US trade war began since 2018, it has effect huge amount of global industries and global economy. Both countries’ currency and those who has close business relationship countries’ currency exchange rate were influenced. Both country kept put increasing tariffs on their products so that huge amount of global industries had to seek different hedge strategies to reduce foreign exchange risks or eliminate them to offset foreign currency exchange risk. This research paper would first introduce the definition of the trade and trade war, then analyze what was happening during China-US trade war, next use examples from 10-K to show how US tech giants use financial strategy to hedge their risk exposure and state possible situations might facing when hedging. Last conclude with four ways to reduce reduce and forecast the foreign currency exchange rate risks.