Genomic sequencing specialist Illumina (ILMN -5.26%) was something of a victim in the U.S.-China trade spat on Tuesday. The government of the sprawling Asian nation placed the U.S. company on a blacklist, and given the size and power of that economy, investors weren’t happy about the news. They traded out of Illumina to leave it with a more than 5% price decline, on a day when the S&P 500 (^GSPC 0.72%) landed in positive territory with a 0.7% increase.
Caught in the middle
China’s “blacklist of entities” now has two more entries — Illumina and fashion conglomerate PVH — after its government put the companies on notice late Monday. The move is clearly a retaliatory measure following the announcement of tariffs imposed by the Trump administration on Chinese exports.
As reported by Bloomberg, the country’s Ministry of Commerce claimed “that PVH and Illumina infringed the principles of market transactions and undertook damaging actions against Chinese companies.” It did not provide any details of these alleged actions.
The news agency quoted an unnamed Illumina spokesperson as saying that it is currently assessing the situation, and it hopes for a “positive resolution.”
A big trade spat
The damage to Illumina’s stock will depend whether it continues to be included on that rather vague blacklist. And, further into the future, how the broader U.S.-China fight develops — given the relatively quick semi-resolutions of similar fights with Canada and Mexico — this one might not last all that long.
Meanwhile, it doesn’t seem coincidental that Illumina, which is the most significant genetic sequencing business in the world, has a large Chinese rival in biotech BGI Genomics.
