Technology Sectors in China and America Could Come Under Fire
Trade tensions between America and China are only getting worse. The countries have been locked in growing hostilities in trade, with the two trading blows and regulations meant to counter the other.
The newest shake up between the nations is the banning of sales to Chinese telecom giant ZTE Corp. The ban will last for seven years, and is the result of ZTE illegally shipping American goods to Iran and violating an agreement reached after being caught. As the company’s stock falls, ZTE claims the move will be devastating to their business.
This is only the newest move in the chess game of trade between China and the United States. The move has all tech firms based in China either seeing their stocks fall or worrying when it will happen next.
The uncertainty of sanctions against companies isn’t going over well in China.
American firms are concerned about retaliation from China. The threat of strong tariffs on Chinese goods is still fresh, and hand in hand with this new move as well as considering even stronger restrictions on the Chinese tech sector, China’s response likely will not be without pain for American companies.
It’s entirely possible that the United States has opened up a door for China with this move. While China has announced its intention to place tariffs on American goods, the fact of the matter is that exports from America to China truly are not that high. China had been running out of arms in the fight.
Now, however, the tech sector might come into their sights. With American tech giants such as Apple doing business in China—business so entrenched that they can’t simply leave China preemptively—China has a number of American companies in a very precarious position.
American export tariffs could only take China so far in this trade war, but as the American tech sector could be under fire next, it doesn’t look like tensions will simmer down any time soon.