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How a trade war with China could hurt the tech industry

How a trade war with China could hurt the tech industry

 

The U.S. and China have been engaged in a war of words, each threatening to levy heavy taxes on each other’s imports — and the tech sector could be staring down the barrel.

So far, most information and communication technology has been exempted from the U.S. proposal. But tensions are starting to trickle into tech.

U.S. officials on Monday banned American companies from selling to Chinese phone maker ZTE, hinting at further protectionist measures and stripping American chip leader Qualcomm of a key customer.

In this Nov. 9, 2017, file photo, U.S. President Donald Trump, right, chats with Chinese President Xi Jinping.  How a trade war with China could hurt the tech industry 105114519 AP 18016719139328

In this Nov. 9, 2017, file photo, U.S. President Donald Trump, right, chats with Chinese President Xi Jinping.

Tech sectors with strong links between China and the U.S., like semiconductors, are vulnerable to additional rounds of proposed tariffs.

Analysts say it’s hard to separate any threats to semiconductors — the “brains” and processing power behind everything from smartphones to car consoles — from the larger tech industry.

“We have been inundated with requests from clients to discuss our views on [semiconductors] as it relates to the escalating trade tensions between the U.S. and China,” Credit Suisse analyst John Pitzer wrote earlier this month. “Predicating all the potential moves on a single Chess board is difficult – this feels more like 3-D chess.”

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