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Tuesday, June 26, 2018

Tech Export Control Risk Moving Right Along

We wrote yesterday that mixed signals were coming out of the White House about the extent of new trade measures.

Today the media felt the White House may have backed down from its harsh stance after seeing the market spill on Monday. But that may not be the case.

President Trump now packaging new foreign investment limits within previous legislation was interpreted by the media as backing down. But, to us that legislation would confirm Monday's concerns not cancel them.

Our bigger issue is that of export limits and there too legislation is moving right along. I don't see that as Trump backing down. I doubt China would view today's news as the US backing down.

Export limits would mean that high tech companies could not partner or send goods to a country where their intellectual property was at risk.

Even though the Wall Street Journal reported that Trump "eases" his plans they went on to say, "A bill to make CFIUS reviews even tougher is making its way through Congress. It would create a new export control system to review whether overseas joint ventures are impoperly transferring critical technologies to foreign companies."

The Wall Street Journal calls "even tougher" "eases." Not sure how. Sounds like export control legislation risk is moving right along.

Why we're worried about export control is because it would mean that if exports are denied rights to be sold companies lose revenues which hit earnings. That would hit stock prices.

And as for backing down from export control Commerce Secretary Wilbur Ross said Sunday, "All possibilities that would better protect American technology, including potential changes to export controls, are under review."

It doesn't sound like there's been any change there. If anything it sounds like the US found its mechanism to move forward.

With this legislation moving right along, export control could risk revenues of companies with Chinese exposure.


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    1. Trumps talking about border control. Does that affect you in any way?

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