Donald Trump’s executive order is a conflict with China.
We all know that the Republican candidate and incumbent president Donald Trump was defeated by Joe Biden in the 46th US election. So now, Trump is trying to take advantage of his current powers to build up pressure on China by signing an executive order that bans United States investments in Chinese firms under the International Emergency Economic Powers Act.
Trump in his executive order mentioned that he found China exploiting US capital in order to resource and also to enable the development and modernization of their military, intelligence, and other security apparatuses which is a threat to US homeland and US forces overseas. Hence according to the reports this powerful action was taken to protect national security.
Now, amidst Pandemic Trump has created a conflict with China on security and technology by restricting American investors from holding shares in companies that are suspected by US officials to be controlled by Chinese military. Hence as a result the executive order has led to downfall of 4% and 8% in the Chinese telecom stock like China Mobile and China Telecom. According to a White House official, the order also restricts from purchasing or investing in emerging markets funds. This will impact beyond Chinese telecom industry as it also includes construction, aerospace,aviation and shipping companies. But high-profile companies listed such as Huawei Technologies Ltd, Hikvision Digital Technologies says that they are private companies and is not under the control of Chinese Military.
According to the reports, the executive order will restrict trades in securities of around 31 Chinese companies as it is connected and backed up by Chinese military and is a threat to United States national security. The order is expected to come into effect even before Joe Biden takes up the responsibilities of president.