The start of the new trading week was a huge boon for established Chinese tech stocks. In the recent trade dispute with the US, perhaps even a reversal, the rest has led to a bullish surge in the sector, with many known titles driving price increases.
It was in these Alibaba Group (NYSE: Baba)earning nearly 6% that day. It’s more specialized Tencent Holdings (OTC: TCEHY) and jd.com (NASDAQ: JD) Although he never reached that height, he still enjoyed prominent benefits, rising nearly 3% and almost 5% each.
Some of the most dramatic stock price movements these days have been linked to the trade war, and that trend was in full effect on Monday.
Over the weekend, President Trump announced another series of exemptions from his announcement Customs;These cover a wide range of technology products, including semiconductors, flash drives, TV displays, smartphones, and more (and therefore pop that wins the market apple Monday stock).
Alibaba, Tencent, and JD.com all operate service-oriented businesses, so in theory the exemptions were not directly and deeply profitable. However, rising tides benefit all boats, so what is considered suitable for component manufacturers is also advantageous for other engineers.
To be clear, this does not mean that all Chinese tech companies are completely off the hook. Anything that manufactures goods in 20 product categories eligible for the new exemption will be subject to the general 20% customs duties on goods imported from the country into the United States. But it’s much lighter than the 145% initially charged.
Furthermore, the motivation behind the exemption was not to give such companies a permanent break. It appears to have been clearly recognized that Chinese technological component manufacturers will give time to set operations in the US, one of the key tariff targets in the first place.
As a result of the announcement, Trump’s associate reporter Kush Desai argued that “at the president’s direction, these companies are preventing manufacturing from directing manufacturing to land as quickly as possible in the United States.”
Needless to say, Chinese tech manufacturers were not in a hurry to issue a statement claiming they would. The country’s government seems somewhat justly to have strong hands in the current conflict. Perhaps it even believes it can ride a storm.
Judging by their collective responses, investors feel the same way. Like other corners of manufacturing, much of the hardware created by the high-tech industry has been made overseas for many years.
