Nvidia is already under examination in one of its largest markets due to US export limitations on selling expensive chips to China.
According to the Wall Street Journal, China is increasing its examination of US IT companies such as Nvidia, Apple, and Google, retaliating against US trade restrictions through antitrust investigations and regulatory delays.
Some of the most well-known American tech companies are now caught in the crossfire of the growing trade war between the US and China. As per The Wall Street Journal, China is intensifying its examination of firms such as Nvidia, Apple, Google, Broadcom, and Synopsys, retaliating against US trade restrictions through regulatory obstacles and antitrust probes.
Beijing is using this tactic to retaliate against Washington’s efforts to restrict Chinese access to cutting-edge technology, especially in the semiconductor industry. The largest tech companies in the world are being drawn farther into a trade war that doesn’t appear to be abating as both nations impose stricter regulations.
How US Corporations Are Facing More Pressure From China
China is making it harder for US businesses doing business there by leveraging its regulatory authority. Beijing’s decision to postpone approval of Synopsys’ $35 billion acquisition of Ansys, a significant deal in the semiconductor design industry, is one significant step, according to The Wall Street Journal. China is sending a message by delaying down or denying such deals: Beijing will make it more difficult for American businesses to conduct business in China if the US restricts China’s access to technology.
Nvidia is already under examination in one of its largest markets due to US export limitations on selling expensive chips to China. Beijing is examining ways to impose control over international companies that depend on the Chinese economy, including Apple, which depends on China for both manufacturing and sales.
Retaliation: A Well-Known Strategy
China’s recent actions are similar to those taken by the US in the past. In an effort to lessen reliance on Chinese production, Washington has approved the CHIPS Act, restricted China’s access to cutting-edge semiconductors, and placed trade restrictions on Huawei. China is now using US IT companies as leverage in its own form of economic pressure.
However, there are hazards associated with this strategy. US corporations may begin searching for alternatives if China makes it too tough for them to operate there. To lessen their need on the Chinese economy, many businesses are already considering moving their operations to Southeast Asia, India, or other areas. China may lose out on billions of dollars in investment if that occurs widely.
The Implications For Global Tech
Serious uncertainty is being created by the escalating trade war for large tech businesses that have operations in both China and the United States. China provides a significant portion of the revenue for companies such as Nvidia, Apple, and Google in addition to their production needs. Should tensions continue to rise, these companies may be compelled to reconsider their long-term plans, including the locations of their production and distribution facilities.
Meanwhile, international supply networks may become much more intricate. Moving away from China could result in slower manufacturing timelines and greater costs for anything from AI technology to consumer goods.
Now What?
The trade war is likely to go on since neither China nor the US appear prepared to compromise. China’s heightened inspection of US IT companies shows that it is prepared to oppose Washington’s policies through economic pressure and regulatory barriers. On the other hand, if American companies begin to leave China, it may eventually harm Beijing’s economy.
Since both nations are engaged in a struggle for economic and technological supremacy, the effects will extend much beyond these two superpowers. Consumers, supply networks, and multinational IT businesses will all be impacted as the trade war continues.
