Just as mainstream news media attempts to placate investors with delusions that the trade-wars are over, both sides continue to fire warning shots with the latest from Washington considering an emergency law to halt Chinese investment in US tech.
Bloomberg reports that Heath Tarbert, an assistant Treasury secretary, says at event in Washington, that the U.S. is considering using an emergency law against China, as outlined by the International Emergency Economic Powers Act.
The Comment from Tarbert, who oversees international markets and investment policy, confirms a Bloomberg report that the U.S. was considering the law to crackdown on Chinese investments in technologies the U.S. deems sensitive.
Treasury Department officials are working on plans to identify technology sectors in which Chinese companies would be banned from investing, such as semiconductors and so-called 5G wireless communications, according to four people with knowledge of the proposal, who spoke on the condition of anonymity.
The investment curbs would be the latest step in President Donald Trump’s plan to punish China for what the U.S. sees as violations of American intellectual-property rights. The president asked Treasury Secretary Steven Mnuchin to consider investment restrictions on Chinese firms after the administration released the results of its probe into China’s IP practices last week.
One thing is for sure, this is far from over – no matter how many dead cat bounces in stocks are used to delude investors into believing that trade wars are just words for now.
“The trade issue and uncertainty related to that is not going to fade in one day because all of a sudden we started thinking that we would reach some sort of a settlement with China,” said Krishna Memani, chief investment officer at OppenheimerFunds.
“This is going to be somewhat of a long process for things to settle down.”
Earlier this month, the U.S. president rejected Broadcom’s hostile takeover of Qualcomm, sending a message that his administration won’t look kindly on any deal that would give China an edge in critical technology.