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.
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.”