China’s first major response to President Donald Trump’s tariffs wasn’t like the U.S.’s approach, which tackled all Chinese imports. Instead, Beijing singled out a handful of big areas — and major companies — to pile on the pressure.
Google (GOOGL+2.19%) was the first named casualty of the trade war.
China’s State Administration for Market Regulation (SAMR) announced an investigation into Google just minutes after the U.S. levied tariffs of 10% on all imports from the nation. In a one-sentence statement, the agency said Google was suspected of violating anti-monopoly laws. An investigation could lead to fines or other penalties.
Google launched its search engine in China in 2006 before pulling back from the mainland in 2010 over censorship disputes and a major hack. The company still works with Chinese partners, such as advertisers, and Chinese phonemakers also largely use Google’s Android operating system.
Google, which reports its full-year 2024 earnings Wednesday afternoon, said 17% of global sales came from the Asia-Pacific region in 2023.
Google, Illumina (ILMN-5.40%), PVH, and Intel (INTC+0.28%) did not immediately respond to requests for comment.
A few other companies are also facing investigations or possible sanctions from China. In December, SAMR launched a probe into whether Nvidia’s (NVDA+2.82%) 2020 acquisition of Israeli chip designer Mellanox Technologies for $6.9 billion violated anti-monopoly laws.
China’s Commerce Ministry also put PVH Corp, which owns fashion brands Calvin Klein (PVH-1.37%) and Tommy Hilfiger, and biotechnology firm Illumina, on its “unreliable entity” list. That could lead to those firms being sanctioned. In a statement, the ministry said the firms “violated normal market trading principles” and discriminated against Chinese companies.
Illumina in 2023 reported revenue of $384 million in the “Greater China” region, in which it includes Hong Kong and Taiwan, compared to $4.5 billion revenue overall. PVH recorded $1.6 billion in revenue from the Asia-Pacific region in 2023, compared to $9.2 billion in overall sales.
China’s Ministry of Commerce said last month that PVH was engaged in “improper” conduct related to the Xinjiang region without elaborating, Reuters reported. The agency launched an investigation last September into whether PVH “unjustly” boycotted Xinjiang cotton and other products.
Xinjiang produces about a fifth of the world’s cotton and is home to the Uyghurs, a Muslim minority group that has allegedly been subject to human rights violations by China’s government. In 2020, human rights groups alleged that just about the entire fashion industry was complicit in the forced labor perpetrated in the region. Major players were quick to distance themselves, although actual success has been mixed.
In a statement, PVH said it was “deeply disappointed” with the ministry’s decision, adding that it maintains “strict compliance” with both regulations and industry standards. “We will continue our engagement with relevant authorities and look forward to a positive resolution,” the company said.
The Financial Times, citing two people familiar with the situation, also reports that regulators are looking into opening a formal probe into struggling tech giant Intel. Last October, the Cybersecurity Association of China, an industry group, alleged Intel “constantly harmed” Beijing’s interests.
China on Tuesday also said it would add a 15% duty to imports of U.S. coal and liquified natural gas on Feb. 10, along with a 10% tariff on crude oil, agricultural machinery, certain cars, and pickup trucks. It also plans to impose export controls on goods and technology related to critical minerals, including tungsten and tellurium.
That could hurt the automakers that ship a relatively small amount of large-engine cars and pickup trucks to China. Just $10.4 million worth of medium- and heavy-duty trucks were exported to China in 2023, along with $6 million worth of passenger vehicles and light trucks, according to the International Trade Administration.
Firms like Caterpillar (CAT-0.15%), AGCO (AGCO+2.32%), and Deere & Co. (DE+0.75%), which make and sell farm equipment, may also be impacted.
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