Trump tariff war risks shooting down Newcastle Jets

The ripple effects of Donald Trump’s aggressive trade war with China have reached the Newcastle Jets soccer team.

Newcastle Jets owner Martin Lee. Picture: AAP

The ripple effects of Donald Trump’s aggressive trade war have reached as far as a soccer team in Newcastle, whose ­Chinese owner’s financial commitment has been put in doubt by a 25 per cent US tariff.

Multi-billionaire Martin Lee has considered a big chop to the budget of his Newcastle Jets after watching his LED lighting fortune cut in half in only five months.

His industry was slapped with the tariff in an effort to lessen the trade imbalance between the US and China.

Mr Lee bought the Jets from Football Federation Australia for $5 million in 2016, after the governing body had taken the ­licence from the previous owner, fallen coal baron Nathan Tinkler. Mr Lee was considered a billionaire at the time, but the plunging share price of his Ledman Opto-electronics Group clearly has him worried about assets such as the Jets, which hosted and lost last season’s A-League grand final to Melbourne Victory.

The Australian can reveal that Mr Lee approached Jets management several months ago and floated the idea of cutting as much as $600,000 from the players’ wages bill.

While sources say he eventually pulled back, given the enormous effect it would have on the club’s chances of success this season, it is clear he remains nervous about the situation with the US and the impact it could have on his business interests here and at home.

Mr Lee is chairman of the Shenzhen Stock Exchange-listed Ledman, which makes LED signage. Some of the signage has been used at A-League matches via a deal with outdoor media company QMS. Ledman’s share price has more than halved from more than 11 Chinese renminbi a share at the end of May — just weeks after the Jets lost the A-League grand final — to be trading now at about 5.20 renminbi a share.

The US President has led the effort to impose a series of tariffs on Chinese imports to America, including lighting components.

The flow-on effect for the Jets of the 25 per cent tariff could be disastrous if the situation worsens. Newcastle’s budget is in the bottom half of the 10-team national competition and a significant reduction in the players’ wages budget would have serious consequences for the club’s operations. The Jets have been the least active in the transfer market in the off-season, signing just five players, most on modest wages.

The Jets have had their share of issues with owners during the club’s 14 years in the A-league. One-time coal billionaire Mr Tinkler had his ownership stripped by former soccer boss Frank Lowy after his wealth plunged, only a few years after property developer Con Constantine was forced out when the global financial crisis struck his fortune.

Mr Lee signed one-time Gosford mayor and former Central Coast Mariners boss Lawrie McKinna as chief executive but reportedly lost $3 million in his first season in control of the Jets, who finished with the wooden spoon after winning just five of 27 games.

Mr McKinna, who helped broker Mr Lee’s deal with the FFA, engineered the signing of coach Ernie Merrick. He guided the Jets to second spot on the table before a controversial 1-0 loss in the grand final at home in Newcastle on May 5.

A keen football fan, Mr Lee also owns a Shenzhen team in China and has the naming rights for Portugal’s second division.

The Jets are one of seven of the 10 A-League clubs owned by foreign interests.