As trade tensions between the United States and China have escalated, companies such as Alphabet Inc (NASDAQ:GOOGL)'s Google have suspended some busniess with Chinese firm Huawei.
What To Know
On May 15, the Trump administration added Huawei to a list of companies that U.S. firms can no longer trade with unless they have a licence. The "entity list" bans the company from acquiring technology from U.S. firms without government approval.
As a result, Google has suspended licensing of Android software to Huawei’s smartphones, while U.S. chipmakers such as Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM) and Broadcom (NASDAQ:AVGO) have told their workers they will stop supplying Huawei, according to Bloomberg.
Why It's Important
The move is having a rippling effect across the industry.
Several other stocks are rattled by the trade war, with several semiconductor names trading lower: Xilinx, Inc. (NASDAQ:XLNX), STMicroelectronics NV (NASDAQ:STM), Taiwan Semiconductor Mfg. Co. Ltd (NASDAQ:TSM), Micron Technology, Inc. (NASDAQ:MU) Advanced Micro Devices, Inc.(NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA).
In response to the ban, Huawei's Twitter account tweeted, “Lose-Lose, Washington’s decision to force U.S. companies to stop doing business with tech giant #Huawei creates losers on both sides. #HuaweiFacts”
There is widespread speculation China may also temporarily hike tariffs for Apple Inc (NASDAQ:AAPL).
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