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.
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According to BofA Securities analyst Wamsi Mohan, Apple could move device assembly to factories in other countries, something the company has been doing since COVID exposed weakness in its supply chain.
If Apple builds 80% of its devices outside of China, it would only see a $0.05 earnings per share impact this fiscal year. If 50% are sourced from outside of China that could rise to between $0.07 and $0.12 per share.
China’s antitrust crackdown would similarly put a dent in Apple’s earnings, but it wouldn’t be a wipeout, Wedbush’s Dan Ives explained in an investor note.
The company pulled in $26 billion in Services revenue, which includes App Store sales, in Q1 and $124 billion in overall sales for the quarter. According to Ives, Apple generates $5 billion a year via its Chinese App Store, which is a relatively thin slice of the company’s overall pie.
“It’s less about revenue exposure for investors and more about building US/China tensions with US Big Tech in line for retaliatory shots across the bow,” Ives wrote in his memo.
Intel, Google, and Nvidia are also facing potential antitrust investigations as part of China’s response to US tariffs, and it could mean trouble for Intel in particular.
The chipmaker generates the bulk of its revenue through sales in China. In 2024, China accounted for $15.5 billion of the company’s $53.1 billion in revenue. The US, Intel’s second-largest region, made up $12.9 billion.
Intel is in the midst of a multiyear turnaround effort, putting the company in a particularly precarious situation if China decides to take some kind of action against the company.
Google, for its part, does very little business in China. After pulling its operations from the company years ago, the only real presence the company has is selling ads for Chinese businesses looking to reach foreign customers.
“It’s almost comical that China is considering regulating Google — since Google is effectively banned there,” Deepwater Asset Management managing partner Gene Munster wrote in a research note.
Things are a bit shakier for Nvidia. The company is under pressure from both China and the US after China launched a probe into the company in December following then-President Biden's move to restrict exports of certain Nvidia chips to the country. And after the debut of DeepSeek's AI models, which the company developed using underpowered Nvidia chips, the US is considering tightening those export restrictions even further.
China accounted for $5.4 billion of Nvidia’s $35 billion in revenue in Q3, well behind the US’s $14.8 billion in sales. But as one of the AI industry’s largest markets, China is an important piece of the company’s overall strategy.
It’s not entirely clear what an antitrust probe would mean for Nvidia in China, but if the US forces the company to restrict more chips than it already does, it could face a revenue headwind out of the region.
For now, Big Tech has to contend with the US’s tariffs. But with China signaling it’s willing to put a hurting on Silicon Valley companies if Trump pushes things further, firms won’t be able to rest comfortably for some time.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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