Don't let tech earnings season and Trump's battle with Iran make you forget the very real impact of the ongoing U.S. trade conflict with China

Goldman Sachs is out Monday with a harsh reminder on how escalating trade tensions with China could influence S&P 500 I:GSPC companies. In short, the worst-case scenario would see corporate bottom lines decimated and likely, stock prices.  

Writes Goldman Sachs strategist David Kostin:

"We consider adverse scenarios in which tariffs are placed on all imports from China or globally. For all US industry, roughly 15% of cost of goods sold (COGS) is imported. We assume that S&P 500 companies, which are more global in nature and have more complex supply chains, import roughly 30% of COGS. This is consistent with the 29% of S&P 500 sales is generated outside the US. Imports from China comprise 18% of total US imports. Conservatively assuming no substitution to other suppliers or pass-through of costs, and no boost to domestic revenues or change in economic activity, a 10% tariff on all imports from China would lower our 2019 S&P 500 EPS estimate by 3% to $165. If tensions spread and a 10% tariff were implemented on all US imports (highest rate since 1940s) our EPS estimate would fall by 15% to $145." 

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