Bessent sees US aircraft engines, chemicals as leverage in trade talks with China — here’s what investors should know

The U.S.-China relationship has entered another high-stakes chapter as the Trump administration seeks to secure a more advantageous trade policy with the country.

In a Sept. 24 Fox Business interview, Treasury Secretary Scott Bessent said the U.S. can leverage its strength in aircraft engines and parts and certain chemicals in trade discussions with China. (1)

“We’re not without levers on our side,” he told business reporter Maria Bartiromo. “We have plenty of products that they depend on us for.”

For investors, the implications are clear: Companies tied to critical sectors such as aerospace and chemical manufacturing may see both heightened risks and new opportunities.

The shifting policy environment could reshape balance sheets, valuations and long-term growth paths.

The U.S. is at a clear advantage in aerospace. Aircraft engines and parts are not easily substituted, and China depends on U.S. and European manufacturers for aviation technology.

This dynamic could translate into increased support for American aerospace companies through government contracts or preferential trade treatment. Government backing in strategic industries often boosts investor confidence. (2)

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Meanwhile, Bessent noted that many of the world’s high-performance semiconductors — used to make microchips — are currently produced in Taiwan, a potential “single greatest point of failure” for the global economy. (3)

For some time, the U.S. has been trying to increase its own domestic production of semiconductors and encourage production in countries perceived as allies. Under the Biden administration, the 2022 CHIPS and Science Act allocated over $52 billion to strengthen U.S. semiconductor capabilities.

For investors, companies involved in domestic chip production, materials and equipment may stand to benefit from new capital inflows.

But there’s a flipside. Businesses deeply dependent on China — whether as a market for exports or as a source of critical inputs — are vulnerable to disruptions.

For example, U.S. firms imported nearly $439 billion worth of goods from China in 2024, making China the second-largest supplier of U.S. imports.

Tariffs, restrictions or retaliatory policies could significantly increase costs and squeeze margins for companies reliant on Chinese supply chains.

Investors should closely monitor firms with high exposure to China. Tech hardware companies, consumer goods manufacturers and even automakers face risks if supply chains tighten or demand in China weakens as the country focuses on its own made-in-China products.

The key is to strike a balance between caution and fear. If investors panic-sell in response to headlines, they could lock in losses and miss potential gains as new winners emerge.

A more measured approach involves rebalancing your portfolio to reduce risk and identify businesses who stand to benefit from U.S. government subsidies and domestic production.

Financial advisors recommend staying informed, diversifying across sectors and geographies and avoiding emotional investment decisions.

Though markets are unpredictable, investors can control costs, practice asset allocation and diversification and maintain long-term discipline. (4)

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Fox Business (1); Roosevelt Institute (2); Reuters (3); Vanguard (4)

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.