U.S. is only considering bashing China on trade now – China will retaliate if the U.S. crosses the line
Ambar Warrick ’24, July 17, joined Investing.com's news team in July 2022 to cover Asian financial markets. He has over six years of experience covering financial markets across Europe, Asia, and the Americas, and has worked across multiple asset classes, “Asian stocks sink as US-China trade tensions spark technology rout,” INVESTING.COM, accessed July 17, 2024, https://www.investing.com/news/stock-market-news/asian-stocks-sink-as-uschina-trade-tensions-spark-technology-rout-3524142
Most Asian stocks fell on Thursday, with losses centered around technology and chipmaking shares as the threat of more U.S. restrictions on China ramped up concerns over a renewed trade war between the countries.
Recent comments by Republican presidential candidate Donald Trump on U.S. defense spending on Taiwan also kept sentiment towards regional markets on edge.
Asian stocks markets a weak lead-in from Wall Street, where the S&P 500 and NASDAQ Composite plummeted on selling in chip and technology stocks. The sectors were also hit with extended profit-taking, as optimism over interest rate cuts saw investors pivot into more economically sensitive sectors.
U.S. stock index futures rose in Asian trade, recovering slightly from Wednesday’s losses.
Asian chip, tech stocks slide on concerns over US-China trade
Tech-heavy indexes were the worst performers in Asia on Thursday, with Japan’s Nikkei 225 tumbling 2.1% on losses in chipmaking stocks. Tokyo Electron Ltd. (TYO:8035), the country’s most valuable chipmaker, slid over 8% after a Bloomberg report suggested the company could face more U.S. scrutiny over its supplying to Chinese markets.
The Bloomberg report said that the U.S. is considering stricter trade restrictions on China if companies including Tokyo Electron and ASML Holding NV ADR (NASDAQ:ASML) continue supplying chip technology to China.
Such a move could represent continued efforts by the Biden administration to cut China off from advancements in artificial intelligence. It could also draw severe retaliatory measures from Beijing, sparking a renewed trade war between the world’s biggest economies.