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Donald Trump’s quest to reform the United States economy by implementing tariffs is moving quickly. The U.S. President had barely been back in the White House for a week when he started taking steps toward levying tariffs against Canada, Mexico and China.
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After a few days of negotiations, the tariffs against both U.S. neighbors have been paused after Mexico and Canada’s leaders reached agreements with Trump. However, the U.S.’s new 10% tariff against all Chinese imports has taken effect, and it is poised to severely impact many different industries and companies.
China’s government has already demonstrated that it won’t be backing down, though, announcing retaliatory tariffs on coal and liquefied natural gas. But that’s not the only bad news for U.S. companies coming out of Beijing.
China has decided to continue its strategy of striking back at the U.S. by investigating its companies.
Multiple tech leaders are caught in the trade war crossfires
On Tuesday, February 4, the Chinese State Administration for Market Regulation released a statement announcing that it would be commencing an investigation into Google (GOOGL) .
According to the Financial Times, it will “focus on dominance of the US group’s Android operating system and any harm caused to Chinese phonemakers, such as Oppo and Xiaomi, which use the software.”
This isn’t the first time in recent months that China has investigated a U.S. tech company on these grounds.
Related: New trade war with China could be a major blow to top tech stocks
In December 2024, regulators announced that they would be investigating Nvidia (NVDA) on the grounds that the artificial intelligence (AI) leader might have committed antitrust violations shortly following restrictions from President Joe Biden's AI chip exports to China.
James Lewis of the Center for Strategic and International Studies (CSIS), a nonpartisan think tank, offered context on China's decision, stating, “The timing is not a coincidence. It's mainly a message to the US government—the Chinese have decided they're not just going to take sanction after sanction.”
TheStreet previously reported that this trend could have severe implications for tech stocks if China continued to scrutinize U.S. companies intensely.
Months later, that scrutiny doesn't seem to be subsiding. Reports indicate that in addition to the Google and Nvidia investigations, China is also considering a probe into Intel (INTC) .
“The next step will be to see if Trump ratchets up tariffs on China and what that brings or if this is a path to trade negotiations,” reports Wall Street veteran Chris Versace, who adds that investors should be "prepared for uncertainty and continued volatility in the market.”