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Trump's Tech War vs. Strong Data
08/10/2020 9:45 am EST
Chinese exports are on the rise despite rhetoric heating up from the U.S. President, reports Fiona Cincotta.
Stocks had a choppy day on Friday as investors weighed President Trump taking aim at Chinese tech, impressive Chinese and German trade data, and nervousness over the July Employment report.
President Trump’s executive order giving U.S. firm 45 days to stop dealings with Chinese owned social media platforms TikTok and WeChat is the latest move by the White House in an increasingly broad campaign against China dragging on sentiment
Earlier on Thursday President Trump also advised that Chinese firms listed on U.S. stock exchanges delisted unless they can provide U.S. regulators with access to their accounts.
These moves are unlikely to be taken lying down by China and could potentially see China blocking U.S. big Tech firms such as Apple (AAPL) or Microsoft (MSFT). Whilst tech was always an undercurrent in the US - Sino trade war, this latest move points to the potential start of a more explicit tech war?
Timing is everything and doesn’t bode well for the next U.S.–Chinese meeting over progress in the Phase one trade deal next week.
Chinese exports surge
The attacks by President Trump and flaring up of U.S.-Chinese tensions have overshadowed the surge in Chinese exports. Trade data from China showed that exports soared 7.2% compared to a year earlier. This is significantly ahead of 0.2% increase forecast and points to the Chinese economic recovery gaining momentum.
German exports jump 14.9%
Upbeat data from Germany is going someway to offset the Trump inspired downbeat mood. German exports rose in June for a second straight month and rose by a convincing 14.9% in June, while imports increased 7%. The data adds to mounting evidence that the economic recovery in Germany is on a solid footing and comes following factory orders data yesterday, which smashed expectations (see DAX chart below).
Still no U.S. rescue package in sight
Developments on Capitol Hill will be in focus as the Democrats and Republicans have so far failed to agree on a new stimulus package for America to support it through the Coronavirus pandemic. The two sides remain far apart on what size the package should be. The summer recess is due to start today.
Fiona Cincotta is a Market Analyst for Currency Live
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