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Ambarella falls as Commerce Department adds Hikvision to entity list

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Fermi Wang, CEO, Ambarella

Justin Solomon | CNBC

Shares of chipmaker Ambarella fell as much as 12% in extended trading on Monday after one of its Chinese customers, video surveillance company Hikvision, was blacklisted by the U.S. government.

Hikvision was one of 28 companies the Commerce Department added to the so-called Entity List, restricting its ability to do business with American firms. Several component companies have been wrapped up in the U.S. government’s efforts to limit hardware manufacturers from transacting with Chinese companies, most notably Huawei. As the trade war intensifies, the list is expanding.

Ambarella, which makes processors for cameras and other vision systems, said in its most recent annual report that its video processing solutions are used by Hikvision, though it didn’t say what percentage of revenue comes from the Chinese company. Hikvision sells video cameras, video recorders and related equipment, and its products have reportedly been deployed to help with surveillance in China’s Xinjiang region, where Muslims have been placed in “re-education camps.”

Ambarella warned about the potential for trade conflicts to emerge in its latest quarterly report:

General trade tensions between the United States and China have been escalating in 2018 and 2019, which has, in our view, created and will continue to create an uncertain business environment. While tariffs and other retaliatory trade measures have not yet had a significant impact on our business or results of operations, we cannot predict future developments. In particular, if additional tariffs or trade restrictions are imposed on our SoC solutions or the products of our customers, or trade restrictions are imposed on our ability to conduct business with certain customers, there could be a negative impact on our operations and financial performance. For example, if trade restrictions were placed on a significant customer, such as our China IP security customers, affecting our ability to do business with them, it would likely have a material adverse effect on our business and financial condition.

Ambarella is based in Santa Clara, California, and has a $1.9 billion market cap as of Monday’s close. Other customers include Alphabet and GoPro. Hikvision is based in Hangzhou.

In addition to Hikvision, Chinese artificial intelligence companies Megvii and SenseTime are being put on the Entity List, according to an update to the Federal Register that is scheduled to be published in Wednesday.

WATCH: Qualcomm president optimistic U.S.-China trade tensions will be resolved

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Boris Johnson can turn his victory into history if he can save the UK from division

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Prime Minister Boris Johnson leaves Downing Street for Buckingham Palace where he will seek permission to form the next government during an audience with Queen Elizabeth II at Downing Street on December 13, 2019 in London, England.

Dan Kitwood | Getty Images News | Getty Images

It is just the sort of script one might expect from Boris Johnson, one of the most enigmatically fascinating personalities of our times.

Prime Minister Johnson – who famously craves both public attention and a place in history – won the former and a shot at the latter through a British election victory this week that was the most convincing conservative victory since Margaret Thatcher in 1987. To save the United Kingdom itself, however, he must reverse course, or at least amend direction, on much of what he has said and done to win in the first place.

I opposed Brexit on economic and political grounds yet, at the same time, Johnson might have the political flexibility, the intellectual chops and the Churchillian ambition to confound his critics along the five lines of action he must simultaneously pursue to find his historic place.

  • Most importantly, he’ll have to negotiate a “no-tariffs, no-quotas” trade deal by end-2020 with a European Union that he has disparaged, knowing that it by some distance is the U.K.’s major trade partner.
  • Second, he will have to rapidly restore external economic confidence in a country that has been suffering disinvestment, an economic slowdown, and doubts about its continued role as a European and global financial hub.
  • Third, he should still aspire to get a trade and investment deal with an impeachment-distracted President Trump. At the same time, he should share with voters how unlikely that will be and embrace what might be faster and easier opportunities in Asia, namely negotiating his way into the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • Fourth, he’ll have to abandon much of the populist rhetoric that got him elected and embrace his encouraging “One Nation” message of this week that could heal the country’s divisions – and perhaps also slow a European-wide and global populist trend.
  • Finally, he’ll need save the United Kingdom from unraveling by convincing Scotland and Northern Ireland of their future place – while heading off another Scottish independence referendum. A successful EU negotiation will help that.

Media pundits in recent months have compared and associated the rise of Boris Johnson and Donald Trump as populists who have turned their countries’ politics upside down. Yet the comparisons only go so far, given Boris’ bookish, multilingual, multicultural background and intellectual passion.

He was born in Manhattan as Alexander, then raised in Brussels until age 11, before being shipped to British boarding a year after his mother’s breakdown, a life richly chronicled by Tom McTague in The Atlantic last July. Somewhere along the way the quiet child became the boisterous, eccentric British Boris. He developed a comic demeanor, a disheveled mean (and mane), a rapier intellect with a taste for the classics, and an insatiable desire to be liked.

From all of this grew his self-proclaimed ambition to be “world king.”

“I often thought that the idea of being world king,” said his mother of her illness’ impact on Boris, “was a wish to make him unhurtable, invincible somehow, safe from the pains of life, the pains of your mother disappearing for eight months, the pains of your parents splitting up.” The biographer Sonia Purnell says Johnson told girlfriends that his way of coping was to make himself invulnerable “so that he would never experience such pain again.”

The Brexit referendum and— three years later— his election vote are part psychological and part political drama for Boris Johnson, the stuff of a West End musical. His Friday speech on the steps of 10 Downing Street showed how quickly he can change his tune from that of the campaign to one of governance.

Speaking to those voters who opposed him and wished to remain in the EU, he said, “I want you to know that we in this One Nation Conservative government will never ignore your good and positive feelings – of warmth and sympathy toward the other nations of Europe.”

He went further.

“As we work together with the EU as friends and sovereign equals in tackling climate change and terrorism, in building academic and scientific cooperation, redoubling our trading relationship…,” he said, “I urge everyone to find closure and let the healing begin.”

If the U.K.’s economy emerges as robust and healthy, other European countries might wonder about the value of staying in.

That will be easier said than done as Johnson will now have to decide what kind of U.K. he wishes to build – one more akin to its neighbors in the EU or one more resembling a low-tax, deregulated Singapore-on-Thames.

“Brexit will formally happen next month, to much fanfare,” writes the Economist, “but the hardest arguments, about whether to forgo market access for the ability to deregulate, have not begun. Mr. Johnson will either have to face down his own Brexit ultras or hammer the economy with a minimal EU deal.”

French President Emmanuel Macron, enamored by his colleague’s intellect and linguistic skill, has called Boris Johnson “a leader with genuine strategic vision” who should be taken seriously. This week he extended an olive branch while in Brussels, telling “British friends and allies something very simple: by this general election, you confirmed the choice made more than three years ago, but you are not leaving Europe.”

On the other hand, he has warned, the best way to reach the most ambitious trade agreement with the EU would be if the U.K. essentially says “we don’t want to change very much.”

So, the drama will continue. If the U.K.’s economy emerges as robust and healthy, other European countries might wonder about the value of staying in. If Johnson defines his country as too close to the European Union, irrespective of economic logic, his base may well ask what the past three years’ drama has achieved other than serving Johnson’s own political ambitions.

It’s time to raise the curtain on the next act.

Frederick Kempe is a best-selling author, prize-winning journalist and president & CEO of the Atlantic Council, one of the United States’ most influential think tanks on global affairs. He worked at The Wall Street Journal for more than 25 years as a foreign correspondent, assistant managing editor and as the longest-serving editor of the paper’s European edition. His latest book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times best-seller and has been published in more than a dozen languages. Follow him on Twitter @FredKempe and subscribe here to Inflection Points, his look each Saturday at the past week’s top stories and trends.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.



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‘Historic’ deal with China will be good for global growth: Steven Mnuchin

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Treasury Secretary Steven Mnuchin speaks to the news media after giving a television interview at the White House in Washington, December 3, 2018.

Leah Millis | Reuters

The “historic” phase one trade agreement reached Friday between the U.S. and China will boost global growth, according to U.S. Treasury Secretary Steven Mnuchin.

Speaking to CNBC’s Hadley Gamble at the Doha Forum on Saturday, Mnuchin said the partial deal would address a host of issues central to Washington’s trade agenda.

“This deals with intellectual property, this deals with technology transfer, it deals with structural agricultural issues, financial services are opening up, currency understandings, as well as a commitment to purchase U.S. agriculture and U.S. goods,” he said.

Mnuchin also dismissed the notion that the U.S. was pushing back on the rules-based trading system, arguing that a level playing field with China would benefit the global economy.

“For a very long period of time the U.S. was open to China, China was not open to the U.S. There were very strong restrictions and for the first and second largest economy in the world, there should be more trading back and forth and that’s what we’ve been working on, and I think these agreements will not only be good for the U.S., but will be very good for global growth,” he added.

Global stocks surged Friday as Washington and Beijing announced that the partial accord had been reached, averting the next round of U.S. tariffs after a bruising 18-month trade war.

U.S. and Chinese negotiators will now work toward setting a timescale to sign the agreement, which is still subject to legal procedures, with U.S. Trade Representative Robert Lighthizer telling reporters Friday that the two sides would aim to ink the deal in January in Washington.

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Brexit deal will be a ‘good thing for the UK economy,’ US Treasury Secretary says

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Secretary of the Treasury Steven Mnuchin

SAUL LOEB | AFP | Getty Images

Finally completing the Brexit divorce deal between the EU and the U.K. will provide much needed stability for the British economy, U.S. Treasury Secretary Steven Mnuchin told CNBC Saturday.

Prime Minister Boris Johnson won a general election with a thumping majority this week and looks set to complete the first stage of Brexit at the end of January. However, three-and-a-half years of wrangling means it’s begins schedule and that delay has hurt business sentiment and investments.

Speaking to CNBC’s Hadley Gamble at the Doha Forum, Mnuchin said he expects Johnson will now get his deal on Brexit done with his commanding majority in the House of Commons and said the two sides were “absolutely” moving toward trade discussions.

“My expectation is that the prime minister will now get his deal on Brexit done. Which I think is a good thing for the U.K. economy. The U.K. just needs stability on this issue,” he said.

“I’ve been hearing for too long ‘they’re in, they’re out, they’re in, they’re out’ and we’ll begin trading discussions with them. We’re very much looking forward that trading relationship,” he added.

Johnson’s Conservatives now have 365 parliamentary seats, a majority of 80 in the House of Commons. The result, which proved even more decisive than pollsters had forecast, follows a bitterly-fought and divisive election campaign.

In a tweet published Friday morning, President Donald Trump offered his congratulations to the newly-elected prime minister, describing the better-than-expected result for his friend as a “great win.”

“Britain and the United States will now be free to strike a massive new trade deal after Brexit,” Trump said. “This deal has the potential to be far bigger and more lucrative than any deal that could be made with the E.U. Celebrate Boris!”

—CNBC’s Sam Meredith contributed to this article.

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