The tech industry is now beginning to feel the effect of the US-China trade war that was started by the Trump administration. Meanwhile, China retaliates by slapping tariffs on US goods.
A report from CNBC reveals Xiaomi's debut performance which falls short of what was expected from the hardware company. According to the news outlet's correspondence with Kara Swisher of Recode, it was deduced that the slump may have something to do with the trade war going on between the two aforementioned countries.
Besides Asia, China's premiere tech firm is set to spread its roots in other market territories including that of the US. However, it's quite clear that Xiaomi will have a hard time doing so.
As stipulated by the correspondent, the current economic condition could further worsen Xiaomi's, and any other home-grown tech firms, market performance overseas. This is despite the fact that Asian brands have long been struggling to penetrate the US market ever since the earlier US administrations due to some reasons like national security.
China Retaliates
The tension has already been felt by other global market players, including that in Europe, as China is now set to retaliate.
Investors reported that the Xi Jinping administration is hitting back with 25 percent tariffs on a number of US imports, particularly agricultural products. This includes grains, corn, soybeans, meat, fish, and more others. Even so, China imposes additional duty on automobiles that are made in America.
Data from the Guardian report meanwhile shows how the financial conflict reverberates through the Europe market. For example, Spain's Ibex closed at 1.57 percent to 21, 708.06 while Italy's FTSE MIB dropped a higher 1.58 percent 9733.6. Germany's Dax follows the same trend as it dropped 1.53 percent to 12,417.13, while France's Cac ended off 1.48 percent down 5353.93.
If this continues, eventually the US will likely to suffer defeat in the trade war it instigates against the Asian powerhouse.
"Trade wars are not easy to win. They're easy to lose, and the U.S. is on track to lose this trade war," CNBC quoted Yale University's Stephen Roach.
