US President Trump originally planned to impose a new 25% tariff on imports from Mexico and Canada and a 10% tariff on imports from China starting February 4, shocking the global financial market. Fortunately, after coordination, the US announced this morning that it would temporarily suspend the tariffs on Canada and Mexico, allowing Bitcoin to rebound and break through $100,000.
However, the tariffs on China will proceed as scheduled. The Chinese government also took retaliatory measures earlier. According to the announcement of the Chinese Ministry of Finance, starting from February 10, additional tariffs of 10-15% will be imposed on certain US-origin products, and the aggressive retaliation has made the market worry that the China-US trade war will break out again.
Extended reading: Trump suspends tariffs on Mexico and Canada for 30 days, Bitcoin surges to $102,000! China bows down and promises to invest in the US
Asian tech stocks may plummet 20%
Against the backdrop of Trump igniting the global tariff war, Bloomberg reported that Morgan Stanley analysts said in their latest report that due to regional trade risks, high valuations and lack of upside potential, market investors should immediately take profits from Asian tech stocks.
In recent years, the global AI craze has benefited many Asian tech stocks, and Taiwan has also achieved remarkable results in this AI boom, with semiconductor giant TSMC accounting for 64.9% of global wafer foundry manufacturing, becoming an undeniable presence in the global AI boom.
However, analysts Shawn Kim and others stated in the report that the market is generally too optimistic about the profitability of this sector, and if tariffs are imposed and trade tensions escalate, the industry may face a 20% downside risk in the short term:
In the short term, reduce broad exposure to tech stocks and hedge positions in the industry
In addition, Trump has previously threatened to impose more tariffs on computer chips and semiconductors produced overseas. In this regard, Morgan Stanley analysts pointed out that a decline similar to the 2018 China-US trade war is expected in this field.
According to the survey, during the China-US trade war from January 22, 2018 to the temporary truce in December 2018, the TAIEX index fell from a high of 11,270 to 9,400, a drop of 15.6%.
Morgan Stanley: Bullish on China's domestic semiconductors, not global semiconductors
On the other hand, although the Morgan Stanley report is not optimistic about global semiconductor stocks, its analysts said they are more bullish on China's domestic semiconductor industry:
We are more bullish on internet and China's domestic semiconductor stocks, rather than global semiconductors,
The report believes that since China's semiconductor industry has a higher sales proportion in the domestic market, companies such as NAURA, SMIC, and Hua Hong Semiconductor, which are China's wafer foundries and equipment companies, will benefit from the trade tensions.
