Trump Impacts U.S. Tech Stocks with Huawei Ban


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President Donald Trump issued his ban in an announcement to the American public. Huawei, the world’s second-largest cellphone maker after it edged out Apple last year, will soon be entirely cut off from American-made technology it uses, such as microchip software.

Ajinkya Rane and Benjamin Kim

President Donald Trump and United Kingdom Prime Minister Theresa May will discuss this week Trump’s trade ban issued May 15 on Chinese technology conglomerate Huawei, who is currently the world’s top provider of telecom equipment.

According to the executive order, the reasoning behind the ban is “foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services, which store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States.”

Although the trade restriction was a political measure taken to counteract China’s previous tariffs on U.S. imports, it also created ripples in the technology world. The tech-filled Nasdaq Composite Index saw major dips as investors rapidly sold their shares in Huawei suppliers such as Qualcomm, Alphabet, Broadcom and Intel.

Over the course of the next months, the U.S. government will begin to reach out to other allied countries and persuade them to ban Huawei as well. Foreign markets also saw major dips; according to Seeking Alpha, Japan’s Nikkei 225 slipped 0.29% and Australia’s ASX 200 dropped 0.74%. However, South Korea’s Kospi rose 0.77%, most likely due to it being home to one of Huawei’s biggest competitors, Samsung.

Although Huawei has faced severe scrutiny in the past due to various charges of technology theft and illegal business practices by its highest-ranking employees, it has remained at the forefront of the technological race.

“The problem with China cannot be resolved through confrontation,” said Malaysian prime minister Mahathir Mohamad during an interview with Channel NewsAsia in Japan. “It is important that we need to have a forum involving the leaders of the people of East Asia and also of Asia itself, and the World Organization, the United Nations, should be focused on how to establish peace and resolve the problem through peace rather than confrontation.”

The U.S.’ economic relationship with China has always been rocky, and this limitation is not the first of its kind, according to social studies teacher Wind Ralston.

“Our relationship with China has been questionable for quite some time,” Ralston said. “Since the 70s, the change in power and shift to increased manufacturing has led to their economy booming, which has caused conflicts between us and their leaders.”