What: China's placement of PVH on its "unreliable entity" list and antitrust investigation of Google signals a new phase in US-China trade tensions affecting global retail operations.

Why it is important: As global retailers already face supply chain restructuring and digital transformation challenges, China's actions against PVH and Google create additional pressure points that could accelerate the reorganisation of global retail operations.

China's latest regulatory actions mark a significant escalation in trade tensions with the United States, targeting both traditional retail and digital commerce sectors. The Commerce Ministry's decision to place PVH Corp, owner of Calvin Klein and Tommy Hilfiger, on its "unreliable entity" list comes with potential sanctions including trade freezes and work permit revocations. Simultaneously, the launch of an antitrust investigation into Google's operations, despite its limited direct presence in China, signals a broader strategy targeting US business interests. These measures were announced in direct response to new US tariffs on Chinese goods, demonstrating China's willingness to use targeted regulatory actions against prominent American companies.

The implications for affected businesses are substantial, with PVH facing potential disruption to its Chinese operations and Google encountering increased scrutiny of its advertising relationships with local partners. This development represents a new phase in the ongoing trade dispute, where regulatory tools are being deployed alongside traditional tariff measures to exert pressure on international businesses.

IADS Notes: The latest Chinese measures against PVH and Google represent a significant escalation in the ongoing reshaping of global retail dynamics. As noted in January 2025, Trump's proposed 60% tariff on Chinese imports was already threatening to add USD 640 billion to US import costs, and this reciprocal action from China further complicates the landscape. The targeting of PVH aligns with broader industry shifts observed in November 2024, where fashion brands were actively diversifying away from China, while Google's investigation parallels increasing digital platform scrutiny, exemplified by January 2025's TikTok ban threat affecting USD 12.3 billion in advertising revenue.

These developments follow a year of significant supply chain restructuring, with BCG forecasting dramatic shifts in global trade patterns through 2033. The inclusion of major fashion brands on China's "unreliable entity" list particularly impacts the industry, as companies were already grappling with market access challenges, evidenced by December 2024's suspension of major e-commerce operations in Vietnam and September 2024's increased scrutiny of Chinese brands in premium categories.

China targets PVH, Google and other US firms as trade tensions escalate