4 Utility Mutual Funds To Counter US-Sino Trade Spat

Fresh trade tensions between the United States and China are not only inducing volatility in the equity markets again, but also threatening business investment and growth in the country, which is making investors flee to safer grounds.

President Donald Trump’s new executive order on securing the information and communications technology and services supply chain coupled with the prolonged U.S.-China trade war is taking a toll on the technology sector, with blue-chip tech companies and chipmakers being hit hard.

The order gives the government the authority to restrict transactions related to information or communications technology that pose threats to national security. It states that technology which is “designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary” can be blocked by the government.

The order makes it difficult for foreign technology companies to conduct business with American organizations. For instance, the U.S. government blacklisted Huawei Technologies Inc. last week, which prevents American companies from selling or transferring technology to the company without government authorization.

However, the U.S. government temporarily eased some restrictions on the Chinese telecom giant this week, allowing it to buy U.S.-made goods for providing software updates to existing Huawei handsets and maintaining existing networks. But the uncertainty over conducting business and further change in trade policies looms large.

Earlier this month, U.S.-Sino trade talks came to a halt owing to Trump’s dissatisfaction with the progress of negotiations on a new trade agreement. In addition, the increased tariffs on Chinese goods since May 10 worsened the scenario.

But tariffs aren’t the only concern for financial markets now. Trump’s executive order is also affecting U.S. technology companies with international trade and transactions.

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