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A tech war will be the end for this bull market

Tong Kooi Ong
Tong Kooi Ong5/27/2019 07:30 AM GMT+08  • 9 min read
A tech war will be the end for this bull market
(May 27): Investors should probably brace for a protracted impasse on trade talks between the US and China. After the latest round of tariff hikes by both countries, China appears to have hardened its stance, with state media ramping up nationalistic rhet
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(May 27): Investors should probably brace for a protracted impasse on trade talks between the US and China. After the latest round of tariff hikes by both countries, China appears to have hardened its stance, with state media ramping up nationalistic rhetoric. The US blacklisting of Huawei Technologies raised tensions further and has widespread repercussions for many companies that are part of the complicated global supply chain.

In fact, should the tariff war turn into a bona fide tech war, it is very likely to spell the end of this bull market.

A tit-for-tat will stop the export and sharing of technological innovations and materials that will, in turn, have a negative impact on the future growth of technology. This is critical, as many tech businesses are valued on the basis of exponential growth from network effects and continuous innovation. A tech war must surely mean a major collapse in prices for tech stocks, which translates into huge losses for not only traditional funds but also private-equity funds.

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