Trade war: Markets relieved as US relaxes Huawei ban – business live | Business

0
10
Trade war: Markets relieved as US relaxes Huawei ban – business live | Business
Trade war: Markets relieved as US relaxes Huawei ban – business live | Business


Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Tensions between the US and China remains the top issue worrying investors, as fears growth that the trade war will morph into a tech war too.

Overnight, the US has rowed back some of the sanctions imposed on Huawei last week, having possibly realised that the restrictions may have gone too far.

The Chinese telecoms giant has now been given 90 days to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets.

Commerce secretary Wilbur Ross said this new licence will allow US companies to keep doing business with Huawei for the next three months:


“The temporary general licence grants operators time to make other arrangements and the [commerce] department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services.”

That reverses (if only temporarily) the blacklisting of Huawei announced just last week, which prevented it buying equipment from American firms, or selling its services in the US.

The move is bringing some calm to the markets, which were rattled yesterday after Google dramatically suspended support for Huawei.

Douglas Fraser
(@BBCDouglasF)

Having hit Huawei with a ‘keep out’ order, the Trump administration has temporarily revoked large parts of it, having now realised how embedded Huawei already is. This is “to allow operations to continue for existing Huawei mobile phone users and rural broadband networks”


May 20, 2019

Douglas Fraser
(@BBCDouglasF)

It’s almost as if they hadn’t thought this through.


May 20, 2019

The move should help third-parties who rely on Huawei’s equipment as they scramble to find alternative suppliers. Otherwise, some smaller telcos could suffer network outages

It may also deter Beijing from hitting back at US companies.

Yesterday, China’s ambassador to the European Union condemned America’s “wrong behaviour”, and vowed to respond.

Zhang Ming called Donald Trump’s moves “politically motivated” and an “abuse of export-control measures, telling Bloomberg:


“Chinese companies’ legitimate rights and interests are being undermined, so the Chinese government will not sit idly by.”




Traders on the floor at the New York Stock Exchange last night.

Traders on the floor at the New York Stock Exchange last night. Photograph: Brendan McDermid/Reuters

Anxiety over the Huawei crisis hit technology stocks yesterday, sending America’s Nasdaq index sliding by almost 1.5%.

But shares have jumped in China overnight, and we’re expecting a positive open in Europe too:

IGSquawk
(@IGSquawk)

European Opening Calls:#FTSE 7327 +0.22%#DAX 12088 +0.39%#CAC 5368 +0.17%#MIB 20637 +0.47%#IBEX 9225 +0.28%


May 21, 2019

Also coming up today

Europe’s top economic thinktank, the OECD, will issues its latest economic outlook this morning. Trade tensions are likely to feature highly.

Plus, we get a new healthcheck on Britain’s factories.

The agenda

  • 10am GMT: OECD publishes new economic outlook
  • 11am GMT: CBI’s latest monthly industrial trends survey





SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here