Tech companies saw their shares rise Monday following trade talks between U.S. President Donald Trump and Chinese President Xi Jinping.
Shares for Foxconn, a manufacturing company that assembles smartphones for Chinese tech giant Huawei, jumped 1.6% in Taiwan. Subsidiary Foxconn Industrial Internet rose to the maximum daily limit of 10% in Shanghai, CNN Business reported Monday.
US President Donald Trump and China’s President Xi Jinping attend a bilateral meeting on the sidelines of the G20 Summit in Osaka on June 29, 2019. (BRENDAN SMIALOWSKI/AFP/Getty Images)
Trump and Xi met to discuss trade between the U.S. and China at the G20 summit in Osaka, Japan, over the weekend after Trump threatened to implement additional U.S. tariffs on $300 billion worth of Chinese imports and duties of up to 25% on remaining untaxed Chinese goods.
The president said Saturday that “U.S. companies can sell their equipment to Huawei” in an attempt to ease trade tension between the U.S. and China. (RELATED: Trump: US-China Trade Talks Are ‘Back On Track’ After G20 Meeting)
“We send and we sell to Huawei a tremendous amount of product that goes into the various things that they make, and I said that that’s ok.”
Trump comments on #Huawei at #G20 in Osaka, Japan #G20大阪サミット #G20Summit pic.twitter.com/79s8KjP8Cj
— TicToc by Bloomberg (@tictoc) June 29, 2019
Other companies that partner with Huawei also saw shares rise, including Chinese optical firm company Ningbo Exciton Technology, which increased 5.4%; contract chipmaker TSMC, which increased 4%; and chipmaker Unisplendour, which gained 6.4%, CNN Business reported.
American companies that supply material to Huawei, such as Intel (INTC), Qualcomm (QCOM), Broadcom (AVGO) and Micron (MICR), also saw shares rise in premarket trading.
Google, too, will likely see a boost since the agreement was made because it can sell its Android license to the smartphone developer. (RELATED: Universities Push Back On FBI Request To Monitor Chinese-Sponsored Students)
“Financial markets are showing their relief,” Brock Silvers, managing director of China-based private equity firm Kaiyuan Capital, told Bloomberg. “Equities are up broadly, and Huawei suppliers, in particular, are showing renewed confidence. … Celebration may be premature, as Trump can easily reinstate his Huawei ban should trade talks falter. While both parties clearly want a deal, we’ve yet to see any evidence that remaining issues are any closer to be resolved.”
Trump signed an executive order to ban U.S. Huawei sales in May due to national security concerns after the Department of Justice charged the company for bank fraud, wire fraud and violating Iran sanctions. Huawei CEO Ren Zhengfei said the blacklisting move would cost the company $30 billion in revenue.
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