E Market Briefing For Tuesday, May 28

A 'Digital Iron Curtain' aptly describes the '1st Tech Cold War' seemingly unfolding. Perhaps it won't be so draconian beyond reasonably competitive multi-polar trends; the awareness of which in-itself can presage some sort of calming tone to the inflammatory rhetoric. Even Chinese leaders are aware.. failing to 'deal' can lead to a chopping-off of their own heads and losing the manufacturing relationship they built up for decades. So they need not 'fire up' dragons in the U.S. they've been nibbling at (by IP theft etc.) for so many years; but instead stop chasing their own tail and stem the outgoing tide for a lot of their industries. And I'm sure the U.S. negotiating team counts on it.

However, in the short-run this creates a serious 'lack of transparency' for all markets; and of course derails the excessive expectations that preceded the 'reneging' on the part of Beijing (it's not even important that they have quite a different view; as the outcome is essentially the same if they push too far); while accusing us of pushing for too much. I understand about sovereignty and so on; but they were coming-along until they decided to approach us as they did the Japanese years ago in a trade battle; and that's a mistake. As I mentioned; I suspect President Xi was ready to deal; and others in China's hierarchy somehow overrode him. Regardless they have a tougher time, by virtue of starting the so-called People's War and castigating U.S. products. 

   

All this retards any sort of sensible guidance from technology companies (others as well); while the swirling currents even make it hard to manage or decide where to source product and/or materials from. It's a supply-chain quagmire that presumably unfolds; and that makes logistic managers contemplate just solving it once-and-for-all, by moving production to alternative countries with (often) even lower manufacturing cost basis than China, as in many cases it's not coming back to the United States.

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