Stocks are dropping after China hints at retaliation after the US blacklisted Chinese tech firms
- European stocks and US futures dropped on Tuesday after the US blacklisted Chinese technology companies over alleged human rights abuses, prompting China to hint it could retaliate.
- The Trump administration added video-surveillance giants Hangzhou Hikvision and Zhejiang Dahua, Alibaba-backed AI titans SenseTime, and Megvii, and other Chinese companies to the list of firms that require a US government license to do business with US companies.
- When a reporter asked a Chinese foreign ministry spokesman whether China would retaliate, he replied "stay tuned," according to Bloomberg.
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European stocks and US futures dropped on Tuesday after the US blacklisted Chinese technology companies over alleged human rights abuses, prompting China to hint it may retaliate. The rising tensions come days before trade talks between officials from the world's two largest economies in Washington, tempering hopes of a deal to end the trade war.
"European stocks are in the red today as the market pares back hopes for a deal between the US and China this week as trade talks resume," Neil Wilson, chief market analyst for Markets.com, said in a morning note. "US futures are also in the doldrums as China says it will retaliate against US blacklisting of Chinese companies," he added. "The posturing ahead of the talks is entirely in character and does not bode well for a positive outcome."
Here's the market roundup as of 11:20 a.m. in London (6:20 a.m. EST):
- European equities have dropped with Germany's DAX down 1%, Britain's FTSE 100 down 0.3%, and the Euro Stoxx 50 down 0.9%.
- Asian indexes closed higher after several days of holiday closures. The Shanghai Composite rose 0.3%, Hong Kong's Hang Seng rose 0.3%, and Japan's Nikkei rose 1%.
- US stocks are set to open lower. Futures underlying the Dow Jones Industrial Average fell 0.7%, while S&P 500 and Nasdaq futures slid 0.6%.
- Oil prices have slumped with West Texas Intermediate down 0.7% at $52.40, and Brent down 0.5% at $58.10.
The Trump administration has added video-surveillance giants Hangzhou Hikvision and Zhejiang Dahua, Alibaba-backed AI titans SenseTime and Megvii, and other Chinese firms to the list of companies that require a US government license to do business with US companies, the US Commerce Department said in a notice.
"These entities have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups," the government agency said.
China was displeased with the decision, which follows America's blacklisting of Chinese telecoms group Huawei on national security grounds earlier this year.
"We urge the US side to immediately correct its mistake, withdraw the relevant decision and stop interfering in China's internal affairs," a spokesman for China's foreign ministry said, according to Bloomberg. "China will continue to take firm and forceful measures to resolutely safeguard national sovereignty, security, and development interests."
When a reporter asked him whether China would retaliate, the spokesman replied "stay tuned," Bloomberg reported.