Enquiring minds want to know: What effect will Trump's policies have on tech industries. The truth is, there's much more that we don't know about the incoming administration's planned policies than we do know. It's a certainty, however, that this will be no normal presidency and that change will be in the works across nearly all industries, including tech. We also know that the signs aren't particularly auspicious for the tech sector right now.
Hardware: While it's true that software is eating the world, software isn't much good without hardware to run it on, and hardware might be set to take a double whammy under the incoming administration. Since hardly any hardware is manufactured in the U.S., it's a given that the cost of everything from servers to storage to mobile phones will go up if the new president makes good on his plans to impose tariffs on imported goods. Items made in China could become even more compromised with Trump's threatened special sanctions on China if he's unable to negotiate a deal with them over issues such as currency valuation.
Although the tariffs are Trump's way of moving manufacturing jobs back home, they would pose particular difficulties for hardware makers. Even if it were possible to quickly move production to the U.S., that production would still be dependent on rare earth elements which mostly come from China with its 95% global market share. If a trade war were to break out between the U.S. and China, expect these rare earths to be used as a weapon to ease restrictions on Chinese made goods.
A trade war with China definitely looms. An op-ed piece on Sunday in China's state-run newspaper, Global Times, warned of retaliation. “If he does list China as a currency manipulator and slap steep tariffs on Chinese imports, China will take countermeasures.” According to the article, the Chinese government would “take a tit-for-tat approach.” Among other things, the article promises that “iPhone sales in China will suffer a setback,” which would be costly for Apple, which has a 16.8 percent share of China's mobile market, with over 131 million iPhones in use.
We also shouldn't expect to see much in the way of government-supported research on renewable energy, either through tax credits or direct funding. This comes at a time when renewables are slowly approaching feasibility for powering datacenters and other high energy consumption applications. Although Trump hasn't said much about government funded R&D, he has indicated he mainly supports funding research to solve “immediate and ongoing” problems. Renewable energy is certainly not going to be on that list, as oil, coal and natural gas are the cornerstones of his energy policy.
Immigration: One of the ways that U.S. based tech giants have kept an edge over competition from abroad is by seeking to employ the most talented engineers and developers without regard to nationality, which is why companies from Silicon Valley to Redmond have for years been pushing for an expansion of the H-1B visa program.
It's no surprise that expansion of the H-1B program isn't included in Trump's playbook. During the campaign he said he supports “high-skilled” immigration in general, but opposes H-1B visas in particular, and went so far as to suggest raising wage requirements for them. The good news is that software development usually doesn't require the physical presence of developers, which leaves the door open for talented developers to contribute to U.S.-based projects from their home countries.
Cybersecurity: You might be excused for thinking that after all of the hoopla over the hacking of the DNC and the subsequent Wikileaks, that the incoming administration would have a well thought out plan for cybersecurity. So far, that's not true. “So we have to get very, very tough on cyber and cyber warfare,” was about as precise as he got during the debates, and the “vision” spelled out on the Trump/Pence campaign website is just as vague. To put it succinctly, he'll create task forces and seek recommendations.
What we know of Trump's position on encryption should be worrisome for a tech industry trying to market solutions in a post-Snowden world. He's indicated that he approves of attempts to force Apple to crack the encrypted iPhone used by the San Bernardino shooter. Expect him to support moves to force the inclusion of back doors in encrypted software and devices for the benefit of law enforcement.
The brightest light on the horizon when trying to read the tea leaves on the new administration might be that Trump, who's never held public office, probably isn't exactly sure what he's going to do. Not only are his plans not yet completely formulated, he's most likely just now beginning to understand the limitations of his soon-to-be new office. He's also likely to change his mind on more than a few of his campaign promises as they come in conflict with his pro-business stance.
One things you can take to the bank: the first 100 days of the Trump administration are going to be the most interesting 100 days we've ever seen from a new president.
