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Japan-South Korea tensions exacerbate global trade conflict

Ken Peng

By Ken Peng

Head - Asia Investment Strategy

July 11, 2019Posted InEquities and Investment Strategy

  • Japan's restrictions on exports of key tech components to Korea could meaningfully impact the tech supply chain in Asia. 
  • China's tech supply chain may be under further pressure when US supply is already tightened. Taiwanese suppliers may be a net beneficiary.
  • This adds to the list of pending negotiations for global trade. We suspect that we may have to wait until after the July 21 Upper House elections in Japan for negotiations to begin, coinciding with the US-Japan and US-China talks.
  • Investors should remain cautious near term on Korean tech names since they have not yet reflected potential escalations. Taiwanese tech suppliers may benefit. 

Click here to read Asia Strategy in full.