In a recently published report, Fitch Ratings noted that the new U.S., China trade restrictions could be broadly disruptive. Below are some key takeaways, as reported by Reuters.
- A possible blacklisting of U.S. companies as retaliation for restrictions on Huawei would be disruptive for U.S. technology sector.
- A ban on rare earth metals exports to U.S. as retaliation for restrictions on Huawei would be disruptive for U.S. technology sector.
- Financial effects of trade restrictions on tech cos getting significant rev from China/using rare earth minerals in manufacturing may be material.
- It is too early to assess potential credit implications on tech cos due to new U.S., China trade restrictions.
- Effectiveness of unilateral sanctions will be complicated by China’s dependence on critical components made by foreign cos, exports.
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