Some of the biggest US technology firms, including Nvidia, Google, Apple, and Meta could soon face the full wrath of EU regulators and Chinese authorities as a result of the ongoing global tariffs war sparked by the election of Donald Trump as President.

That return received open support, and generous funding, from a number of US tech giants, in the hope that Trump would protect their interests on the global stage, especially in Europe. The companies will soon find out if it was a wise bet, as both the EU and China seem set to take regulatory action against them.

EU officials are weighing up plans to use the bloc’s anti-coercion-instrument (ACI) to target US technology firms operating within EU jurisdiction. Dubbed the ‘bazooka’, the ACI was introduced in 2023 and is used as a deterrent when a foreign power, in this case the US, tries to use tariffs to put pressure on the EU.

International law

An EU official was quoted by the Financial Times saying: “All options are on the table.” They added that the use of ACI in this case would not breach any international law.

In March last year, EU officials announced they were investigating whether Alphabet (Google), Meta and Apple had breached the bloc’s Digital Markets Act due to anti-competitive practices. And last month reports emerged that regulators in the EU were temporarily pausing making decisions and imposing fines on US Big Techs in relation to that investigation.

A source had told the FT the return of Donald Trump to the White House was a factor behind the EU’s decision to reassess the situation and, possibly, change the scale and direction of its probes.

China reacts

In a separate but similar move, China’s State Administration for Market Regulation has announced it has opened an investigation into Google’s market dominance in the country. According to people familiar with the matter, the investigation will look into whether Google’s Android operating system was too dominant and caused harm to Chinese competitors who used it, the FT has reported.

The same Chinese agency also opened an investigation into another US Big Tech, Nvidia, in December, “for suspected violations of the country’s anti-monopoly law.”

Intel, another US chipmaker which has more sales in China than anywhere else in the world, could also be facing a similar investigation from the Chinese authorities, according to the FT.

These moves are a clear and direct Chinese response to President Trump’s decision to increase tariffs on Chinese imports, according to analysts. Trump was scheduled to speak to Chinese Premier Xi Jinping over the phone on Tuesday, but the call was cancelled after both sides announced fresh tariffs on each other and China announced the opening of investigations into US tech giants.

Interestingly, China’s retaliatory tariffs increase on US products resulted in a stocks dip in European markets on Tuesday, underlining the complex reality and interconnectedness of modern-day global trade.

Impact on businesses

How much businesses will be affected by the current escalation pretty much depends on which regions or jurisdictions one looks at, and what specific industry or sector one wants to focus on.

For instance in China, some businesses are thinking about relocating to Vietnam, or reshaping their supply chains. The likes of Nike, Adidas and Puma have already moved, as reported by the BBC.

Despite the EU’s recent aggressive stance against US Big Tech, experts believe it is implausible for the bloc to take any drastic action, given the large investments by those firms across Europe, and their overall impact on the European economy.

In the US, giants such as Apple, Nvidia, Microsoft and Amazon “could see significant multiple compression,” and stocks could suffer on the Nasdaq 100. That is due to “the integrated nature of tech manufacturing”, meaning that tech firms could face “higher component costs and potential supply chain disruptions across North America and China,” according to experts.

Another dimension of the US-China trade war that recently shocked financial markets and led to $1 trillion dollar sell-offs in US Big Tech shares is the arrival of DeepSeek, a Chinese AI assistant and chatbot challenger to ChatGPT.

Who will blink first?

Unlike China, where a single ruling party decides the country’s economic policy, the EU bloc looks divided and undecided on how to deal with US pressure. EU trade and competition ministers held an informal meeting in Warsaw on Tuesday to discuss the situation and the options available to them, only for some delegates to leave early.

France’s trade minister Laurent Saint-Martin was quoted by the FT saying: “The worst solution would be each member state trying to have its own relationship with the US. If we want to build European economic strength, we must show the world we are united.”

Similarly, getting caught up in an endless trade war between US and European authorities does not serve the interests of firms like Google, Apple, Meta and others.

These firms have collectively been hit with billions of dollars in fines by EU regulators. An escalation that could result in further financial penalties will not be an attractive prospect.

For now, it’s a stand-off,. Whoever blinks first could end up paying a heavy price.