Report from the New York Times
In Brief – China has included an antitrust investigation of Google in its trade retaliation package responding to the United States’ new 10% across-the-board tariff on Chinese exports to the country. The announcement simply said that the State Administration for Market Regulation (SAMR), China’s competition authority, would investigate Google for possible violations of the country’s antimonopoly law. While Google has not operated its core products, such as Search or YouTube, in China for years, largely due to its refusal to abide by China’s censorship regime, the company does work with Chinese businesses to help them connect with, advertise to, and make devices for internet users outside of China. Last December, SAMR opened an antitrust investigation of US-based chip giant Nvidia, likely in retaliation for ongoing US restrictions on chip sales to China, and a multiyear SAMR investigation of Apple over App Store fee levels charged China-based iPhone app developers may also be accelerated as part of the current trade battle.
Context – China’s plan to pull US tech companies into their US trade showdown may be a precursor of other likely trade conflicts during the first part of the Second Trump Administration. The EU has reportedly been developing a strategy to deal with a US tariff broadside promised by President Trump. Among the potential responses, which include targeted retaliatory tariffs designed to impact politically sensitive US regions and industries, is the possibility that US digital giants are targeted using the EU’s new trade retaliation tool called the “Anti-Coercion Instrument” that allows service industry providers to be hit by tariffs and a wide range of other countermeasures, even including revoking intellectual property rights inside the EU. Many of the leaders of the US digital giants have a much different relationship with President Trump than last time and have increasingly called for US Government help to deal with EU regulation. As political allies of the President they might now be seen as more justifiable sanction targets, or maybe they are seen as too close to the throne to really go after, at least in early days.