China's strategy in trade war: Threaten U.S. tech companies

Chinese officials are building a list of U.S. technology companies that can be targeted with antitrust probes and other tools, hoping to influence the tech executives who are heavily represented in President Trump's orbit.

- Liza Lin & Raffaele Huang

People familiar with Beijing's strategy said the goal was to collect as many cards as possible to play in expected negotiations with the Trump administration over U.S.-China issues, including the tariffs that Trump has imposed on Chinese goods.

Beijing has already said it is investigating Nvidia and Google over alleged antitrust issues. Other American companies in its sights include Apple, Silicon Valley tech company Broadcom and semiconductor-design software vendor Synopsys, said people familiar with the matter. Synopsys has a $35 billion acquisition awaiting approval by Beijing.

China needs all the leverage it can get to hit back at the U.S., and antitrust is one of the most useful, said Tom Nunlist, a Shanghai-based tech policy specialist at consulting firm Trivium China.

"China is on a chip-gathering exercise," said Nunlist, likening the countries to poker players. "They want to come to the table to negotiate and need something to play with."

The strategy carries risks. American companies recently have been less willing than in Trump's first term to go to bat for China, and the threats could backfire by discouraging companies from investing in the country when that is what Beijing wants.

Beijing has added to its regulatory tools in recent years, drawing lessons from America's approach. In 2020, it created an "unreliable entity list" of companies—mimicking a U.S. entity list that blocks Chinese technology leader Huawei and others from doing business with Americans. In 2022, China amended its antitrust law to tighten rules on anticompetitive mergers.

Chinese officials hope to get the attention of people in Trump's world including the executives who sat by his side on inauguration day such as Google's Sundar Pichai and Apple's Tim Cook, said people close to Beijing's policymakers.