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Analysts on how result may impact tech sector

U.S. President Joe Biden in a virtual conference with Chinese President Xi Jinping at the White House in November 2021. Just last month, the U.S. revealed export controls limiting China’s access to particular kinds of innovative semiconductor chips, a relocation that crimps Chinese business’ access to essential tech.

Alex Wong | Getty Images News | Getty Images

The U.S. midterm elections might result in “disruptive changes” in U.S. tech policies if the Republicans take control of Congress, according to an expert.

Though both Republican and Democratic prospects are vowing a hard method on China in a quote to win citizens who see China as a risk to nationwide and task security, the Republicans are most likely to take a more hawkish position.

“What the Republicans and Democrats are completely aligned on is a tough approach on China. One area where they are less aligned on is getting multilateral partners to agree [on the stance toward China],” stated Martin Chorzempa, senior fellow at Peterson Institute for International Economics, on CNBC’s “Squawk Box Asia” on Wednesday, when inquired about how the result of the midterm election may impact U.S.-China relations.

“A lot of Republicans think that is a waste of time. They may just want to go with it alone, but then that creates a lot of friction with the U.S. allies and might lead to more dislocative, disruptive changes in the tech policies,” stated Chorzempa, who pointed out “techno-nationalism” as a hot-button problem.

Just last month, the U.S. revealed export controls limiting China’s access to particular kinds of innovative semiconductor chips, a relocation that crimps Chinese business’ access to essential tech.

Companies will need a license if they utilize American tools to produce particular innovative computing semiconductors or associated production devices for sale to China.

One of the huge difficulties that the tech sector deals with is the friction in between the U.S. and China, which is “pulling companies in different directions and potentially fracturing the global Internet, multinational firms that want to do business in the U.S. and China,” stated Chorzempa.

Potential recipients

But semiconductor business in Taiwan and South Korea might take advantage of a Republican congressional sweep, according to research study company Natixis.

“There are a lot of uncertainties on whether there will be a change if the Republicans take the house or both Senate and House,” stated Natixis’ senior economic expert Gary Ng throughout CNBC’s “Squawk Box Asia” on Wednesday.

It'll be 'very difficult' for Asian firms to produce chips without U.S. tech, says economist

“Increasingly, we are seeing this tougher approach from the U.S., especially from the Republicans, with greater scrutiny of supply chain in tech, especially high tech,” stated Natixis’ senior economic expert Gary Ng throughout CNBC’s “Squawk Box Asia” on Wednesday, including that the pressure will just continue to grow.

“If there is more restriction on Chinese firms, it means there will be more room for growth for [semiconductor companies in] Taiwan, or increasingly even from Korea and Japan as well,” included Ng.

However, in an interview about the chip export curbs with CNBC’s “Squawk Box Asia” last month, Sarah Kreps of Cornell University stated the U.S. ought to keep the “bigger picture” in mind as it attempts to hedge versus China, which it is “putting its East Asian allies at a disadvantage.”

The U.S. has to think about how its chip export curbs could affect its allies, says professor

Blake

News and digital media editor, writer, and communications specialist. Passionate about social justice, equity, and wellness. Covering the news, viewing it differently.

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