With China reportedly contemplating its “retaliation” alternatives after Huawei CFO Meng Wanzhou was arrested in Canada at the request of the DOJ – albeit without anyone in the Trump administration seemingly aware of this – US companies are starting to sweat if China will respond in kind, and are actively reconsidering sending executives to China.
As Bloomberg reports, one such company is US tech giant Cisco, which according to unconfirmed social media reports was restricting non-essential travel by U.S.-based employees into China. However, once news of the tentative travel ban emerged, the California-based maker of computer networking gear told Bloomberg the email was sent to some employees “in error” and that normal business travel to China continues.
It was not clear just how a company can send an email to its employees preventing them from traveling to China erroneously, but we are confident this will be only the first of many such errors to come.
Meanwhile, as Reuters reported officials from major U.S. companies at a meeting in Singapore on Thursday “voiced concerns about retaliation against American firms and their executives.” Several attendees said their companies were considering restricting travel to China and looking to move meetings outside the country.
As Bloomberg adds, the US tech industry is roiled by the escalating trade war between the world’s two biggest economies and the prospect of crippling tariffs on American products made in China and exported globally. Companies such as Cisco and Apple trade with, manufacture in and buy components from China, with executives traveling regularly between the two regions.
So for those – such as JPM’s Marko Kolanovic – who believe last weekend’s G-20 summit was a prelude to a new golden age in Sino-US relations, perhaps consider how many stop logic circuit breakers will be needed for the CME to halt the crash if and when a flashing red headline pops up that Beijing has ordered the arrest of a major US CEO whether in China, or – as the US did – anywhere else in the world.
Read on ZeroHedge