THE ECONOMIST: Donald Trump’s friends with no benefits as antitrust, tariffs close in on Google, Meta, Amazon

In the weeks after the re-election of Donald Trump, the bosses of America’s tech giants worked hard to ingratiate themselves with the returning president, congratulating him publicly and dutifully turning up to his inauguration.

Mark Zuckerberg, the boss of Meta, gushed that it was nice to have an administration that was “proud” of America’s tech champions.

There was good reason for the obsequiousness. During the campaign Mr Trump referred to Meta as an “enemy of the people”. Many in his MAGA movement have accused America’s tech giants of censoring right-wing views.

In 2021 JD Vance, now Mr Trump’s vice-president, called the behemoths “parasitic”. Even the techies surrounding Mr Trump, such as Elon Musk, belong to a different Silicon Valley tribe that is suspicious of big tech.

Three months in, and the bosses of America’s most valuable firms have little to show for all their toadying. Mr Trump appears unwilling to spare them from the trustbuster’s snare and is adding to their troubles with his trade war.

On April 29 the White House accused Amazon of a “hostile and political act” after the company was reported to be planning to display the cost of tariffs for items sold through its website. (Amazon swiftly clarified that the idea had been considered only for Amazon Haul, where it sells ultra-cheap products, and that it would not be implemented.)

Since Mr Trump’s inauguration the combined market value of the five big platforms — Alphabet, Amazon, Apple, Meta and Microsoft — plus Nvidia, America’s semiconductor superstar, has fallen by $US2.3 trillion ($3.6t), or 16 per cent. Just how bad could things get?

Start with antitrust. Neither Andrew Ferguson, whom Mr Trump appointed as chair of the Federal Trade Commission, or Gail Slater, his pick as head of the antitrust division of the Department of Justice, have shown much interest in halting the cases against big tech begun by the Biden Administration.

Ms Slater, who on April 21 described Google as a threat to freedom of speech, freedom of thought and “free American digital markets”, inherited two cases against Alphabet, its corporate parent.

On April 17 a district judge ruled in one of them that the company operates an illegal monopoly in digital advertising. In the other case, a court ruled last year that Google’s search business was an illegal monopoly, too; hearings to decide on remedies will start on May 2nd. The DoJ has urged the court to force Google to sell its Chrome browser, alongside other changes to its business.

Alphabet is not alone. On April 14 hearings began in the FTC’s case against Meta, which the regulator accuses of having maintained an illegal monopoly through its purchase of Instagram in 2012 and WhatsApp in 2014 (which the company denies). Meta has reportedly sought Mr Trump’s help in reaching a settlement with the FTC, with little success so far. The antitrust agencies are also suing Amazon and Apple and investigating Microsoft and Nvidia, for good measure.

On top of all this comes Mr Trump’s trade war. Apple assembles 80 per cent of its iPhones and Macs in China, which explains why its share price fell by almost a quarter in the week after Mr Trump unveiled his “reciprocal tariffs” on April 2.

It recovered somewhat when carve-outs were announced for smartphones and PCs. Even so, an earlier 20 per cent rate on Chinese goods still applies. Prices for iPhones are likely to rise, weighing on already slowing sales. Apple is now reportedly planning to shift assembly of its America-bound smartphones from China to India by the end of 2026.

Nvidia is in the crossfire too. Prices for its chips, which are mostly produced abroad, are likewise set to rise for American customers, which may cool the firm’s red-hot growth.

An even bigger problem is its business in China, which accounted for 13 per cent of revenue in 2024. The American government recently barred it from selling its H20 chip there without an export licence. Nvidia has said that the new rules will wipe $US5.5 billion ($8.6b) from the value of its inventory, a sign that it expects to be granted few permits, if any.

Although analysts reckon it will design a new, less powerful chip for export, the new restrictions will give a leg up to Huawei, a Chinese tech giant that is making ever more sophisticated AI chips.

As for Amazon, Bernstein reckons that about a fifth of the goods it sells in America through its e-commerce platform are made in China, many of which now faces import duties of 145 per cent. On May 2 the de minimis exemption, which spares from tariffs packages valued below $US800, will also be removed for Chinese wares.

Making matters worse, America’s tech giants are also at risk of becoming a “retaliatory lightning rod” in the trade war, notes Mark Shmulik of Bernstein, a broker. China’s watchdogs are already probing Alphabet and Nvidia. Last year the country introduced rules to phase out products made by Microsoft, such as Windows, from government computers. Investors worry that an iPhone ban among state officials could follow.

Ursula von der Leyen, president of the European Commission, has talked of hitting America’s tech giants with levies in response to Mr Trump’s tariffs. On April 23 the EU slapped Apple and Meta with €700m ($1.25b) in fines for breaching its Digital Markets Act — though that was much less than the maximum possible figure, perhaps signalling that Brussels wants to avoid an escalating trade conflict.

Then there are the indirect effects of Mr Trump’s tariff war. Ad sales from Chinese e-commerce companies such as Shein and Temu, which rely heavily on the de minimis trade, could be jeopardised. Last year Meta said that such firms accounted for a tenth of its ad revenue the year before.

On April 25 Sundar Pichai, Alphabet’s boss, admitted on an earnings call that the removal of the de minimis exemption would create a “slight headwind” for its ad business. That may be just the start. If, as expected, America’s economy slows as a result of tariffs, ad spending more broadly could slump.

Big tech’s cloud-computing revenues may take a hit as well. Enterprise customers and startups are already delaying committing themselves to contracts owing to uncertainty over economic conditions, according to JPMorgan Chase, a bank. A pullback in spending on artificial intelligence, on which the tech giants are pinning their hopes for growth, seems possible. Johnson & Johnson recently said that it is cutting spending on AI projects that are not generating returns.

Some remain optimistic that the rest of the president’s term will be brighter for big tech. An insider at one of the giants says he believes that Mr Trump, unlike his predecessor, is willing to “go out to bat” for America’s tech champions abroad. Mr Trump’s first 100 days do not bode well, though. It could be a tricky four years for the tech titans.