What Trump means for technology

While Hillary Clinton was clearly seen by technology companies as the favourable candidate, Donald Trump offered few detailed positions on technology policy. There will also inevitably be major differences between what Trump has said he will do and what he does do or what can do.

Nevertheless, his electoral thrust has been on rejuvenating the traditional manufacturing sector ahead of supporting its thriving technology community.

Trump’s anti-immigration stance is potentially the most obvious issue for technology companies, but while he has stated his opposition to the H1-B speciality occupation non-immigrant visas, he has also said that he supports highly skilled immigration.

His rhetoric on the trade relationship with China has been bombastic. Pledges to take action against currency manipulation, export subsidies and intellectual property theft are aimed at supporting US businesses – but companies such as Apple, for whom China is an important export market, may well suffer from the backlash.

>See also: Will Brexit cause a Techxit? 10 ways Britain’s EU exit will affect technology

Meanwhile, Trump’s proposed reduction in corporate tax rate, if implementable, could clearly lift earnings of companies across the board, but comparatively, the international footprint of many technology companies has meant that they have been adept at keeping their tax rates relatively low, so we would expect other sectors to benefit more.

According to Professor Christian Stadler of Warwick Business School, Trump’s victory brings a similar uncertainty as Brexit did. “We simply don’t know which of his campaign promises will translate into policy,” he said.

UK companies are already facing the prospect of a tougher trading relationship with Europe, and now may also find it even more difficult to trade with the US.

“Trump has spoken out against free trade,” said Stadler, “so expect a dramatic rise in import duty in some industries, such as steel.”

Significantly, Trump could end negotiations between the US and EU on the Transatlantic Trade and Investment Partnership (TTIP), a bi-lateral trade agreement designed to reduce the regulatory barriers between the US and EU nations.

As the UK will no longer be in the EU, this will not have a direct effect – but it suggests that it may be difficult for the UK to negotiate a deal with the US.

So what should UK companies do? “There are two options,” says Stadler. “First, reduce US business and look for alternatives, which could mean a deliberate decision to shrink. Or set up subsidiaries in the US that won’t be affected by the new trade barriers.

“Another effect for UK businesses is that it could be more difficult to get work permits in the US for UK business people.”


Sourced from Dan Ridsdale, head of technology, Edison Investment Research

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics