Asian markets mixed as Trump’s latest sanctions moves to curb China’s Huawei

Asian markets were mixed on Thursday after United States (US) president Donald Trump signed an order on Wednesday that is expected to restrict Chinese telecommunications firms Huawei and ZTE Corp from selling their equipment in the US.

Japan’s Nikkei 225 dipped 0.59% or 125.58 points, at 21,062.98, at the close. South Korea’s main KOSPI benchmark fell 25.09 points or 1.20%, at 2,067.69.

China’s Shanghai Composite Index rose 0.57% or 16.61 points, at 2,955.29 at around 3pm, Beijing time. Smaller board the Shenzhen Composite Index gained 0.37% or 5.76 points, at 1,583.68 while Hong Kong’s Hang Seng Index was up 0.27% or 76.10 points, at 28,360.49.

“National emergency” declared

The executive order which Mr Trump had signed on Wednesday did not call out any countries or companies, but it declared a “national emergency” relating to threats against information and communications technology and services.

Moments later, the US Department of Commerce said it had put Huawei on a blacklist that could forbid it from doing business with American firms.

For months the Trump administration has been trying to persuade allies to deny China a role in building the next-generation 5G mobile networks, cautioning that doing so would lead to restrictions on information sharing with America.

Both Huawei and ZTE have also been marked by the US for alleged schemes on avoiding American sanctions on Iran. Huawei’s chief financial officer Meng Wanzhou, who is the daughter of the company’s founder, remains under house arrest in Vancouver while legal proceedings continue.

The new orders come as Mr Trump continues to put pressure on China into agreeing with their terms in the US-China trade deal. In recent updates, US has threatened to impose tariffs on almost all imports from China, following the recent hiking of duties on US$200 billion of Chinese goods from 10% to 25%.

Yesterday, US treasury secretary Steven Mnuchin repeated to senators his expectation that both the US and China would be meeting in Beijing to continue with their trade talks.