Red tape
Down, up, and down again: U.S. futures and stocks in Asia and Europe are lower on Wednesday as more companies get pulled into the crossfire of President Trump’s trade war with China.
Nvidia fell sharply in premarket trading after the chip giant issued a $5.5 billion write-down on Tuesday because of more restrictions on shipments to China. ASML, a Dutch maker of semiconductor manufacturing equipment, was also down significantly on trade-war warnings.
They’re signs of fresh worries for the semiconductor industry. The Trump administration has ordered manufacturers to obtain permits to ship more of their products to China and other countries. The extra red tape will probably curb Nvidia’s sales of H2O processors intended specifically for the Chinese market.
The sector is already worried about forthcoming tariffs, after a brief reprieve from Trump. (It’s also figuring out how to navigate the tricky spot occupied by Taiwan, a major manufacturing hub, in the U.S.-China trade fight.)
Another cloud for business: Trump signed an executive order on Tuesday tasking the Commerce Department to begin an investigation that could end up putting levies on critical minerals, many of which are used in making high-tech and military equipment.
Trump’s hard-nosed China strategy is beginning to take shape. The aim of country-by-country trade talks is to extract guarantees that the countries will also isolate China as a trade partner, The Wall Street Journal reports.
