China puts Google, Nvidia, Intel in crosshairs as Trump trade dispute escalates
China has opened an antitrust probe against Google – and Nvidia and Intel are also in Beijing’s crosshairs as part of a sweeping set of retaliatory measures after President Trump imposed a new 10% tariff on Chinese imports.
China’s antitrust regulator did not provide details about the Google probe or which part of the business it would target – but sources told the Financial Times that it would focus on the Android operating system and whether Google’s control of the software had harmed Chinese phone makers.
Chinese officials said in December they were investigating US computer chip supplier Nvidia for potential antitrust violations. That decision came shortly after the Biden administration further restricted China’s access to Nvidia’s high-end hardware.
Chinese regulators are also mulling a formal probe against Intel, according to the FT. Further details on a potential case against the chipmaking giant were not immediately clear.
Google faces an antitrust probe in China. AP
“This is all part of a bigger game of high stakes poker between the US and China when it comes to trade negotiations,” Wedbush analyst Dan Ives said in a note. “In the midst of the AI Revolution there are many chips on the table with the first one being TikTok and the 75-day window under the clock to get a deal done.”
The Google probe will proceed despite the fact that the company’s search engine and other core services have been unavailable in China since 2010. China’s threats to take action against Google had been dormant for years before becoming a bargaining chip in the dispute over US-China trade relations.
Shares of Google parent Alphabet were up nearly 2%. The company will report earnings after the bell on Tuesday. Nvidia shares were up 1.6%. Intel shares were flat.
Trump has argued the tariffs are necessary to rebalance existing trade deals. The president imposed 10% duties on all imports from China and 25% on imports from Mexico and Canada – though he paused the latter two after speaking with the country’s leaders.
President Trump and Xi Jinping were not expected to speak on Tuesday. AP
Trump and China’s leader Xi Jinping were not expected to speak Tuesday about the trade dispute, despite earlier reporting to the contrary.
In retaliation, China tightened export controls on five critical minerals – tungsten, tellurium, bismuth, molybdenum and indium – though experts say the move was unlikely to have a major impact on US businesses, according to the Wall Street Journal.
Beijing also added new tariffs on US coal and oil as well as some farm equipment makers and the owner of Calvin Klein and Tommy Hilfiger.
“These moves are warnings that China intends to harm US interests if need be, but still give China the option to back down,” Capital Economics said in a note.
“The probe against Google could conclude without any penalties,” the firm added.
China’s leader Xi Jinping imposed retaliatory trade penalties on the US. AP
Despite pulling most products from China, Google still has offices in Beijing, Shanghai and Shenzhen and maintains some operations related to its digital advertising business and Google Cloud.
Google derives about 1% of its global revenue from China.
The investigation in China is yet another regulatory headache for Google, which was determined last August to have a monopoly over online search in the US and is currently awaiting a judge’s decision on potential remedies, including a possible breakup.
A separate federal antitrust case targeting Google’s digital advertising business is also underway.
With Post wires
