SUMMARY
- The Trade War is returning as a Tech War.
- New US export controls aim to limit Huawei’s access to semiconductors anywhere in the world.
- Tit-for-tat restrictions enforced by Washington and Beijing will likely bring down a new “Silicon Curtain” with companies forced to choose between the Chinese or US market.
- In Japan, the Abe government is seeking to de-couple its firms from China with fiscal support for the relocation of factories out of China and new legislation restricting foreign ownership.
- Technology stock valuations suggest investors are not fully pricing the risk of significant disruption.
- As with the trade war, ASEAN countries could benefit from shifts in the global supply chain.