President Trump’s trade war with China kicked off on Tuesday, with the White House implementing a 10% tariff on all Chinese goods coming into the US. Silicon Valley’s biggest companies are already getting caught up in what could turn into a series of tit-for-tat actions between the world’s two largest economies.
On Tuesday, China’s State Administration for Market Regulation (SAMR) announced that it is opening an antitrust investigation into Google (GOOG, GOOGL). The agency didn’t provide any additional details about the move.
Wednesday, Bloomberg reported that China is considering launching an antitrust investigation into Apple’s (AAPL) App Store practices. SAMR officials have been speaking with Apple executives for some time already, but the timing of the potential probe sets up Apple as another pawn in the economic chess match between the superpowers.
And according to the Financial Times, Chinese officials are considering launching a probe into Intel (INTC) on top of an ongoing investigation into Nvidia (NVDA).
It’s all a part of China’s effort to punish the US’s most prominent companies and inflict its own pain on the US, as the two nations continue to battle it out in the weeks and months ahead. Here’s a rundown of which companies will feel the heat, and which should remain relatively unscathed. For now.
Apple is taking hits from both the US and China in the countries’ latest economic skirmish. The US kicked things off by levying its tariff on goods made in China, which includes Apple products and its all-important iPhone.
That would drive prices on Apple’s hardware higher, potentially by as much as 10%, or force Apple to eat some or all of the tariff cost, lowering iPhone margins. Apple can also file for an exemption to the tariffs, which it did during the prior Trump administration. That would allow it to bring its devices into the US without having to deal with the 10% levy. But so far, there’s no word on whether it’s able to do so.
China is now retaliating via its antitrust investigation into Apple’s App Store practices. The investigation itself isn’t unique. The European Union and other nations have forced Apple to make changes to its App Store requirements and payment system in recent years. And the Justice Department has filed an antitrust suit against Apple, alleging it purposely makes it difficult for consumers to use third-party hardware or switch to another band of devices.
But tariffs and China’s antitrust action are unlikely to significantly damage Apple finances.
