Huawei at the Center of Trade Issues

Although said to be coincidental, the timing of the Huawei blacklist has put added pressure on China during the escalating trade war. The U.S. Commerce Department opened a relief valve announcing Monday it had granted a 90-day license for mobile phone companies and internet broadband providers to work with Huawei to keep existing networks online and protect users from security risks.

The exemption allows Google to send software updates to Huawei phones which use its Android operating system through to August 19. The market is popping on the news but it doesn’t appear to change anything significantly for the companies most affected.

CNBC has a nice little summary of 5 “experts” talking about the Huawei issue, here is the link to the broadcast.

Here’s a quick summary of the discussion

  • Ian Shepherdson – Pantheon Macroeconomics – Not that stressed about it
  • Scott Nations – NationsShares – Concerned, fearful that favorable resolution baked in to S&P, if something negative happens we have a lot of downside, VIX isn’t very high, not enough scheptisim, crash protection @ 52w low, lack of protective puts
  • Mohamed El-Erian – Allianz – US in better position to deal with oil prices and trade tensions, we win trade war, we suffer but win, in a better place than the rest of the world. This is beyond economics, it’s a national security issue, hard to get to quick resolution, we’re going to be dealing with this a while. If US goes full blown on national security, Reaganesque, will change economic dynamics on global scale
  • Craig Moffet – MoffettNathanson – Will not have a big impact on us, we’ve already cut off US Customers, cutting off US Suppliers hurts Huawei globally – thinks it’s national security, but has trade implications to slow China’s win in 5g