Tag: Imperils

03
Oct
2020
Posted in technology

Trump Attack On Huawei Imperils US Chipmakers

Slowly but surely politicians in Washington and Beijing are splitting the internet in half, and that is bad news for innovation and technology investors.

The Chinese foreign minister in September announced new initiatives for global data security, clearly aimed at curtailing efforts by the Trump administration to isolate Chinese technology companies.

It’s too little, too late. Investors should lighten up in select technology shares.

For the better part of two years President Trump and his advisors have been intent on killing Huawei, the giant telecommunication equipment maker. Hawks in his administration see the Chinese 5G leader as a threat to American national security. With every global installation of its next generation wireless networks, the perceived threat grows.

President Trump in 2018 signed an executive order that forbid Huawei from selling telecom gear in the United States. A year later, placement on an entities list forced American companies to obtain a special license to sell products and services to Huawei, effectively choking off the supply of key components. The Commerce Department in May went one step further, maneuvering so that even foreign companies could not work with the firm.

Huawei, once a vibrant firm with $100 billion in global sales, is now struggling to survive.

Emboldened, the White House has started to broadened its attack. Using some of the same tools and rhetoric, Mike Pompeo, State Department chief, targeted other best-in-class Chinese firms, ByteDance, the parent company to TikTok, and Tencent Holdings, maker of WeChat,