US-China dispute damage may be much worse than investors imagine
If the US government is trying to destroy Huawei and slow the development of 5G networks in China, then the US-China relationship is likely headed to a dark place
Global equity investors are likely to be underestimating what may be immense damage across a variety of industries triggered by the US-China trade dispute, particularly involving the latest Huawei escalation, Wall Street analysts say. The Trump administration putting Huawei, and dozens of its affiliates, on an export blacklist means “the US government has halted China’s 5G push”, and is transforming the trade war “into a digital one”, Sean Darby, Jefferies’ chief global equity strategist, wrote in a note. The move may have ramifications well beyond the tech sector as well, analysts at MKM wrote. “The progression from tariffs to direct actions against single Chinese companies and their interlinked supply chains has a wide-ranging impact on profitability that investors will find difficult to quantify,” Darby warned. The Huawei ban “holds back the development of 5G [the largest global capex project] and the growth of internet-of-things,” he said. It also “completely disrupts the globa...
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