Foggy Market Signals from America’s Chip Deal
America’s recent chip deal with the Netherlands and Japan has been seen as a diplomatic win for the United States. However, many are concerned that without more information about what is being agreed upon, it becomes difficult to determine how effective this agreement will be in limiting China’s semiconductor industry.
The U.S.’s goal in negotiating this agreement was to reduce China’s access to certain chips which would slow their technological development and limit their economic growth potential. While some of America’s allies have already joined them in imposing restrictions on Chinese tech companies such as Huawei, they may not be willing to take further steps if it means sacrificing export revenue or other economic benefits from trading with China.
In order for the U.S.-led coalition against Chinese technology dominance to succeed, Washington must convince its allies that there are greater long-term gains at stake than short-term losses from restricting exports of certain products like chipsets and components used by Chinese companies like Huawei Technologies Co Ltd.. It remains unclear whether these countries will ultimately agree but until then market signals remain hazy on just how successful America’s chip deal will be at curbing Beijing’s ambitions.Read more at Reuters