News today in the technology sector shows more potential for political wrangling that could disturb technology markets, although the challenges in question mostly come from a lame-duck administration that’s on its way out the door.
Reuters reports the Trump White House would like to add to companies to its list of blacklisted firms that present national security concerns to the US because of Chinese ownership.
The big story is what firms are being targeted – Tencent, the major Chinese firm behind the WeChat platform, and Alibaba, China’s largest e-commerce retailer.
For background, the Trump administration has been trying to blacklist social media platform TikTok (because of its Chinese parent company ByteDance) for months, but US courts have shut down many of these proposals.
Adding Tencent and Alibaba would ramp up the kinds of global trade conflict that have contributed to volatility on the stock market and other uncertainties.
The latest salvo in these trade conflicts also comes one day after the president’s supporters stormed the capital building to protest his loss in the November presidential election.
The president’s response has led numerous federal officials to consider solutions like a invocation of the 25th amendment, or another impeachment hearing. According to some analysts, it has also given China much more of a free hand during the chaotic transition period.
“While the long delay between the election and the inauguration always creates a degree of confusion over policy and potential for disorder, the angry refusal of President Donald Trump and other Republicans to accept the results has exacerbated this no end,” writes James Griffiths at CNN. “This was exemplified Wednesday night, as protesters stormed the US Capitol, while lawmakers sheltered and were briefly evacuated. With talk of an ‘attempted coup’ and ‘terrorism’ now dominating conversation, it’s unlikely that many in Washington will be paying much attention to actions beyond America’s borders. In recent days, Beijing has struck a major investment agreement with the European Union, one that potentially undermines Washington’s ability to take on China, and launched a major crackdown in Hong Kong, with dozens of activists and lawmakers arrested in a purge that threatens to wipe out the city’s democratic opposition.”
With all of that in mind, most of the saber rattling against Chinese business interests may end as soon as two weeks from now, or sooner. Keep that in mind when adjusting your portfolio for these sorts of US/China tensions.
