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China Announces Measures Against Google, U.S. Firms Amid Escalating Trade Tensions

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China announced a series of new measures on Tuesday targeting U.S. businesses, including tech giant Google, farm equipment manufacturers, and the owner of Calvin Klein, as trade tensions between the U.S. and China escalate. These actions followed the implementation of new U.S. tariffs on Chinese goods, with Beijing responding by imposing its own tariffs on U.S. products, such as coal, oil, and certain autos.

China’s State Administration for Market Regulation launched an investigation into Google, suspecting the company of violating the country’s anti-monopoly laws. While the details of the investigation remain unclear, it marks the latest development in the strained relationship between China and the U.S. Google, whose search engine and other services are blocked in China, derives only about 1% of its global revenue from the country. Despite this, it continues to collaborate with Chinese partners, particularly in advertising.

Alongside the Google probe, China’s Commerce Ministry added two U.S. companies to its “unreliable entity” list: PVH Corp, which owns brands like Calvin Klein and Tommy Hilfiger, and biotech firm Illumina. China accused both companies of taking actions that harmed Chinese enterprises and violated their rights. Being placed on this blacklist subjects companies to fines, trade restrictions, and other sanctions, such as the revocation of work permits for foreign employees. PVH expressed surprise at the decision, emphasizing its compliance with Chinese laws, while Illumina did not respond to media inquiries.

In addition to these measures, China also introduced 10% tariffs on U.S. farm equipment imports, potentially impacting firms such as Caterpillar, Deere & Co, and AGCO. The tariffs could also affect Tesla’s Cybertruck, as China may apply tariffs to this electric truck, pending regulatory approval. Tesla did not immediately comment on the development.

These actions intensify the ongoing trade conflict between the U.S. and China, particularly in sectors like technology and agriculture. Experts suggest that these measures are intended to signal China’s willingness to retaliate against U.S. interests while leaving room for de-escalation. The new tariffs will take effect on February 10, 2025.

 

Former Google Engineer Faces New Charges for Stealing AI Secrets for Chinese Companies

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A former Google software engineer, Linwei Ding, has been hit with a new 14-count indictment, accusing him of stealing artificial intelligence trade secrets to benefit two Chinese companies. Ding, 38, a Chinese national, was charged by a federal grand jury in San Francisco with seven counts of economic espionage and seven counts of theft of trade secrets. The charges stem from his actions during his time at Google, where he allegedly stole sensitive information related to the company’s supercomputing data centers, which are crucial for training large AI models.

Each economic espionage charge carries a maximum 15-year prison sentence and a $5 million fine, while each theft of trade secrets charge is punishable by up to 10 years in prison and a $250,000 fine. Ding was originally indicted in March 2023 on four counts of theft of trade secrets. He remains free on bond as his case proceeds. His defense lawyers have not yet commented.

The case is part of a broader initiative by the Biden administration, known as the Disruptive Technology Strike Force, which was launched in 2023 to prevent advanced technology from being acquired by adversarial countries like China and Russia. According to prosecutors, Ding began stealing proprietary information in 2022, after being recruited by a Chinese startup, and allegedly uploaded more than 1,000 confidential files before May 2023. These files reportedly included chip blueprints aimed at giving Google an edge in the competitive cloud computing industry, particularly against rivals like Amazon and Microsoft, as well as reducing its reliance on Nvidia chips.

Ding’s alleged thefts were discovered when he circulated a PowerPoint presentation detailing his plans for China’s AI industry to employees of the startup he co-founded. Google has not been charged and has cooperated with law enforcement throughout the investigation.

The case is being closely watched and may go to trial, although discussions have been held about a potential resolution.

Apple Shares Rise on Positive Forecast, but China Concerns Persist

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Apple’s stock rose by 2% on Friday, driven by a promising forecast that boosted optimism about a potential iPhone sales rebound. The world’s most valuable company is set to add over $81 billion to its market value of $3.573 trillion if the gains hold. The forecast predicts revenue growth in the low to mid-single digits for the current quarter, suggesting that demand for the iPhone 16 series is picking up despite initial concerns. The iPhone 16, launched without most AI-powered features, has benefited from recent updates, including ChatGPT integration.

Apple’s cautious approach to AI contrasts with the heavy investments made by competitors like Microsoft and Alphabet. However, analysts are reassured by the company’s steady results, particularly as AI spending becomes a focus for big tech companies. Despite these positive developments, Apple faces challenges in its third-largest market, China. The company has yet to secure a local partner for AI features in the region, and rivals like Huawei continue to gain market share. Apple’s sales in China declined by 11% in Q4 2024, but government stimulus measures are expected to mitigate the impact.

At least 12 analysts raised their price targets for Apple, with its stock rising by 30% last year, outpacing Microsoft’s 12% increase. However, Apple’s price-to-earnings ratio stands higher than its competitors, with a forward P/E of 31.12 compared to Microsoft’s 29.2 and Meta’s 26.7.