Stocks on the rise as Trump relaxes Huawei trade restrictions
Added: (Wed May 22 2019)
Pressbox (Press Release) -
Stocks have seen a rally after Monday’s declines as the trump administration places a temporary exemption to the blacklisting of China’s technology giant Huawei, this may be the confidence boosting news investors need to get over the trade tensions. The S&P 500 saw a rise of almost 1.00% equating to 27.03 points when the markets closed on Tuesday. The Dow saw similar increases jumping 0.77% or 197.43 pints, while the NASDAQ outperformed them both with a rise of 1.08% or 83.35 points.
Late on Monday afternoon the department of commerce issued a statement saying it would allow a temporary license for a number of U.S companies to continue their working partnerships with Huawei and affiliates of the company, which has been put into immediate effect and will last for 3 months, or 90 days.
Secretary of Commerce Wilbur Ross released a statement saying “The Temporary General License grants operators time to make other arrangements and the Department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services,In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks.”
This has all come after President Donald Trump upped the ante on trade tensions, and just last week signed an executive order which prevented U.S based companies from conducting business within or outside of the US with technology and telecommunication companies that Trump deems a national security threat
The U.S commerce department had subsequently put Huawei as well as many other companies on its Entity list, after they determined that the companies business practices and activities were “contrary to U.S national security or foreign policy interests.” Huawei fought back against these claims and denied any wrongdoing and explained that none of the companies equipment could be used to spy for the Chinese government.
However the recent move by the Commerce Department effectively mitigates some of the immediate disruption caused to customers and suppliers that the ban would impose. Huawei issued a statement saying that a complete blacklisting would force their U.S Based customers to use inferior, however more expensive alternatives, which would cause the U.S to start falling behind in 5G deployment. Not only has Huawei declined recently, semiconductor companies who supply the tech giant have also seen their share prices slip with the U.S sanctions.
Terry Chu – IEC International