Global stock index futures quickly faded overnight as China said it would retaliate after the Trump administration expanded its trade blacklist to 20 Chinese public security bureaus and eight of the country's top technology firms over alleged human rights violations against Muslim minorities, reported Bloomberg.
- 08-Oct-2019 03:59:02 AM - CHINA FOREIGN MINISTRY, ASKED ABOUT U.S. BLACKLISTING OF CHINESE FIRMS, SAYS U.S. SHOULD CORRECT WRONG WAYS AND STOP INTERFERING IN CHINA'S AFFAIRS
- 08-Oct-2019 03:59:44 AM - CHINA FOREIGN MINISTRY, ASKED ABOUT U.S. BLACKLISTING OF CHINESE FIRMS, SAYS CHINA WILL CONTINUE TO TAKE FIRM AND RESOLUTE MEASURES TO PROTECT ITS SOVEREIGN SECURITY
China foreign ministry spokesman Geng Shuang told reporters "stay tuned" for retaliation strikes against the US. Shuang said Beijing would defend and "safeguard its interests," he also dismissed the accusations that China abuses Muslim minorities in Xinjiang, an autonomous territory in the northwest part of the country.
President Trump's expansion of the blacklist includes video surveillance firm Hikvision, as well as top artificial intelligence and facial recognition technology firms SenseTime Group Ltd and Megvii Technology Ltd.
The move by the Trump administration is a complete shock and could derail trade talks later this week.
Blacklisting Chinese firms is a weapon used by the Trump administration to cripple China's technology sector. These firms now need US government approval to purchase components sold by US companies -- the move could be devastating for these firms because their licenses to buy would likely be denied.
The Trump administration said blacklisting Chinese tech firms on Monday night had nothing to do with trade talks later in the week with China.
Other companies added to the blacklist include Flytek Co, Zhejiang Dahua Technology, Xiamen Meiya Pico Information Co, and Yixin Science and Technology Co.
John Honovich, the founder of surveillance video research company IPVM, told Reuters that Hikvision and Dahua use Intel, Nvidia, Ambarella, Western Digital, and Seagate Technology semiconductor components, the blacklisting of Chinese firms would be disastrous for China's tech sector.
The Trump administration blacklisting Huawei earlier this year shows that they're weaponizing trade policy to crush China's tech sector -- it's only a matter of time before China retaliates and hits Apple.
Global equity futures across Europe and the US fell on the news of China, indicating it would strike back at the Trump administration for blacklisting its tech firms.
E-Mini futures on the S&P 500 dropped .70% after rejecting 2950 at 2 am est., now trades at 2930 at 5:30 am est. Dow Jones and Nasdaq 100 futures are also lower after the news.
European equity futures are mostly red. Europe's Stoxx 600, STX 50, and ESTX 50 declined as much as .40% after China signaled it would retaliate against the US.
And with the odds of trade deal continuing to slide, it's likely these new developments suggest that both countries are far from a deal this week.