Another 28 Chinese Businesses Restricted To Deal With The U.S Firms
The U.S – China trade negotiations to be held this Wednesday and Thursday has been the talk of the financial markets owing to its anticipated effect the Forex, Stock, and Commodities market alike. Just before the negotiations begin, however, the United States of America has announced another 28 Chinese businesses to have been included in the blacklist.
While the move by the Trump administration came out of the blue, it still wasn’t as much a surprise considering the history of the U.S – China trade war that has been going on for over a year. As per the latest declaration, these 28 additional firms will no longer be able to do business with the U.S based enterprises.
Ban Is Not Linked With The Trade Talks – Trump Administration
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
An official statement by the U.S government declared that the ban on these Chinese businesses is not linked with the upcoming trade talks. However, considering that the move was made right before the negotiations, analysts have opinionated that it is directed at getting leverage so that the U.S government can improve its chances of making the trade talks lean a little more in its favor.
The official statement given by the Trump administration has justified the restriction in light of the human rights violations and the abuse of ethnic minorities within the territory of Beijing. President Trump was also reported to have said that the negotiations could lead to a trade deal but it is “unlikely” in his opinion.
Ambarella Share Prices Dropped Following The Ban
Zhejiang Dahua Technology and Hangzhou HikVision are among the two prominent names of Chinese businesses that have been restricted to deal with American companies. In the league of video surveillance products, Hangzhou HikVision has the credential of being the largest supplier of the world. After a Denial of Service (DDoS) attack that was labeled “unparalleled” in history, Zhejiang Dahua Technology was previously caught in a controversy of launching a deceptive firmware that was aimed at “supposedly” fixing a range of identified vulnerabilities in its hardware devices.
“Ambarella” is the U.S supplier for HikVision products in the United States of America. Right after the ban was announced and implemented, Ambarella share prices experienced a significant drop of 12%. As per the technical analysis, as long as it is trading below 54.04 – 55.50 level, the bearish bias will remain in action. According to the 200-day EMA, 47.46 is expected to be the next target for this downtrend.
China had also announced back in July that it will make up a similar list of unreliable U.S based businesses. The incident happened following the investigation of FedEx when Huawei made an allegation that FedEx rerouted its packages without getting formal authorization. After the recent expansion of the blacklist by the U.S government, China may now walk in step with the U.S and announce a blacklist of its own for the U.S businesses.