Although yesterday the markets reacted positively to news about a temporary exemption for Huawei from the sanctions that Donald Trump’s administration imposed on them just last week, today it seems that the bad news for Chinese tech companies will keep on coming.
The President’s administration announced that they will be extending a similar ban to Hikvision, a Chinese company that offers surveillance equipment. As with Huawei, Hikvision will not be able to freely purchase American-made parts and all US companies wishing to trade with it would have to procure a permit from the government, which can easily be denied for political reasons.
Both Huawei and Hikvision stated that they can get a hold of components through alternative sources and were not dependent on the US market for parts, so overall they do not seem too concerned for their business.
The bans on Chinese tech companies (including ZTE Corp, which was blacklisted last year) appear to be a part of the United States’ strategy to put pressure on China in order to negotiate a new trade agreement. However, this type of news has a negative impact on the markets and investors are increasingly growing more and more pessimistic regarding the possibility of an agreement.
