China has implemented new anti-dumping duties on certain US optical fiber imports, with rates ranging from 33.3% to 78.2%. This action follows a six-month investigation by the Chinese Ministry of Commerce. The US companies affected include: – **Corning**: 37.9% – **OFS Fitel**: 33.3% – **Draka Communications Americas**: 78.2% The ministry claims that US exporters are avoiding existing duties by altering their trading strategies.

New Levies Effective Date

These new duties take effect on Thursday and will last until April 21, 2028. They coincide with tariffs imposed in 2023. Analysts see this as a possible reaction to the recent US restrictions on China’s chip industry, indicating escalating trade tensions between the US and China. With the new duties affecting specific US optical fiber companies, we should consider puts on firms like Corning (GLW). China contributed over 20% to Corning’s revenue in 2024, meaning this tariff will significantly impact its earnings outlook. Thus, considering short-term put options makes sense to protect against or profit from a potential stock price decline. This action clearly responds to US chip restrictions, indicating the trade conflict may be expanding beyond semiconductors. We should also be ready for possible retaliation against other US tech sectors that rely heavily on the Chinese market. This scenario supports the idea of protective puts on broader technology ETFs like the Invesco QQQ Trust (QQQ) as a safeguard against rising tensions.

Historical Context of Tariffs

We recall that similar tariff announcements in 2018-2019 caused dramatic market fluctuations, sending the VIX soaring. Currently, the VIX is relatively calm at 17, presenting an opportunity to buy call options on it or related volatility products. This would be a bet that renewed trade tensions will bring fear and uncertainty back to the market soon. While US firms are targeted, non-US competitors in the optical fiber market may gain market share in China. We could look into call options on major European or Asian telecom equipment suppliers unaffected by these duties. This strategy allows us to benefit from the expected shift in trade resulting from these new tariffs. Create your live VT Markets account and start trading now.

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