When Two Elephants Fight, The Grass Suffers!

When Two Elephants Fight, The Grass Suffers!

The U.S. government decision to ban Huawei is already having a huge impact on the company: the firm will sell 40 million – 60 million fewer phones outside China this year. Already, leading France telcos have dropped plans to distribute Huawei Honor phone.

Huawei Technologies Co. is preparing for a drop in international smartphone shipments of 40 million to 60 million as the Trump administration’s blacklisting hammers one of the Chinese tech giant’s most important businesses.

Yes, this pain on Huawei will not be one-directional. Many U.S. companies need China to be in business. They could be the ones that will help Huawei out of the paralysis. WSJ has cleverly documented the pains these small firms could feel if the trade war is not managed. The summary is this: two elephants are fighting, they will be fine – small injuries. The problem is that I do not know about the grass (the world economy).

But in a letter to Trump on Thursday, hundreds of US companies large and small, including retail giants Target and Walmart, warned Trump the new tariff round could cost two million jobs and cut US GDP growth by a full percentage point.

So far, Trump has imposed tariffs on more than $250 billion in Chinese goods but this has spared most consumer items from major price increases.


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