Analysis: The trillion dollar weapon in the U.S.-China tech stock war | WHAT REALLY HAPPENED

Analysis: The trillion dollar weapon in the U.S.-China tech stock war

The threat of a $1 trillion U.S. sanctions hit on the Chinese internet giants that have led emerging market stocks to their first record high since 2007 is overshadowing the rally, just as increased scrutiny from Beijing itself squeezes valuations.

U.S.-Sino tensions ratcheted up in recent days as outgoing President Donald Trump’s administration pushed through a ban on Americans investing in 35 firms it considers to be linked to China’s military.

Sources in Washington last week said Trump was considering adding Alibaba and Tencent, worth a combined $1.3 trillion, the second and third biggest EM stocks in the world and held by almost every major U.S. investment fund, to the list of banned firms.

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