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Goldman Sachs: Huawei exemption expires next week, may trigger escalation of Sino-US conflict

Analysts at Goldman Sachs warned that Aug. 19 is a "critical date for equity investors" as the expiry of a 90-day exemption from export restrictions granted by the U.S. government to Huawei could further escalate the economic conflict between the two countries.

The chances of a quick and satisfactory end to the U.S.-China trade standoff have declined in recent weeks. Equity analysts at Goldman Sachs have warned that the conflict between the two countries could escalate further next week when a short-term waiver that allows U.S. companies to sell certain products and services to Chinese telecommunications giant Huawei Technologies Co. order will expire.

Over the past week, the ongoing trade dispute between the United States and China appeared to have escalated into a full-blown economic conflict, Goldman Sachs chief U.S. equity analyst David Kostin said in a note to clients. He pointed to rising tensions that triggered losses in the S&P 500, Dow Jones and Nasdaq Composite last week.

In addition, an important deadline for U.S. sanctions against Huawei is approaching. The 90-day export restriction exemption granted by the U.S. government to Huawei will expire next Monday (August 19). Kostin called Aug. 19 a “critical date for equity investors” because it could be the trigger for a new round of turmoil.

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