The big technology companies (‘big tech’) share conflicting feelings after Donald Trump’s victory in the presidential elections in the United States. On the one hand, Google, Amazon, Microsoft and Apple celebrate the arrival of the Republican candidate to the White House due to the lower regulatory pressure against the national champions and the advantages of these companies in the domestic market. Also, all companies in the country show some relief at having ruled out the internal crisis that would have caused an eventual victory for Kamala Harris, with more than likely challenges to the results of the polls. None of that has happened, as evidenced by the revaluation of Nasdaq firms as soon as it was known that Trump would return to the residence he abandoned four years ago.
Since the confirmation of Trump’s success, the Internet giants fear that the tariff policy promised in the electoral campaign will close the doors not only to China but to other large countries in that environment. Retaliation by the largest Chinese market to everything that bears the ‘Made in USA’ seal is part of the new horizon with which American companies will coexist. “Where they give, they take,” the Chinese authorities could argue as soon as the opening of trade hostilities is confirmed.
But not all technology companies start from the same starting line for the next four years that await them. On one side of the scale stands out Tesla, Elon Musk’s automobile company that rubs its hands as a result of the magnate’s enthusiastic personal and business involvement in the Trump campaign. In fact, the firm recorded stock market increases of up to 39%, with rallies that managed to resist subsequent profit-taking. On the opposite side are Google and Meta, historically criticized by Trump.
José García Montalvo, professor of economics and researcher at Pompeu Fabra Universityis clear that Trump’s tariff policy will be full of thorns. In his opinion, it is not the most correct economic policy: “Firstly, because it will generate inflation in the US and could cause a reversal in the reduction of interest rates. However, it seems that Trump also wants to control the Federal Reserve and , faced with the prospect that it cannot do so directly, its analysts are already evaluating alternatives. On the other hand, globalization lifted billions of people in underdeveloped countries out of poverty. Tariffs will reverse this process, which, together. to the reduction of aid flows to these countries, will produce unintended consequences on the poorest groups of citizens in underdeveloped countries.
Enrique Dans, professor at IE University, considers that Trump’s proposed tariffs could have significant impacts on technological innovation in the United States, “starting with an increase in costs and a reduction in investment.” “The increase in the prices of components and technological products due to tariffs could reduce the ability of companies to finance their innovation, since they will have to allocate more resources to cover higher production and import costs.”
This IE University expert also draws attention to another consequence: “It is estimated that they will reduce the purchasing power of consumers by about 90 billion dollars annually, which could reduce the demand for new technological products, and could cause disruptions in the chain. of supply”. And he warns that future industrial sectors, such as the electric vehicle industry, where China is a world leader, could face obstacles to compete and innovate in the US market. “And the same could happen with the solar energy sector, which could see its innovation capacity reduced due to the increase in costs of panels and components,” he adds.
Enrique Dans: “The initial euphoria of the Nasdaq “could continue in the short term, but is likely to moderate over time”
Enrique Dans also notes that the Nasdaq’s initial euphoria “could continue in the short term, but is likely to moderate over time.” “On the one hand, deregulation, support for cryptocurrencies and fiscal stimulus could be viewed favorably by the market. But on the other, tariff policy and trade war, market volatility and geopolitical tensions could generate instability that affects negatively to the markets”. “The sustainability of this euphoria will depend on how an unpredictable Trump carries out his policies and how they affect the global geopolitical landscape,” Dans concludes.
Michael Shrage, professor and researcher in Digital Economy at the Massachusetts Institute of Technology (MIT)explains that “when you have a president who wins with a ‘Make America Great Again’ campaign slogan, we are most likely to see a country that enacts policies that relax – rather than tighten – regulatory guidelines”. And he also admits – without hiding a certain irony – that he is “curious to see if the new Administration – to offset its offensive against illegal immigrants and immigration – facilitates the arrival of the most talented technologists in Europe to work, study and innovate in the United States.” Joined”.
From the investment and analysis firm Pictet Digital, Stanislas Effront reminds us by way of context that “technology spending on global GDP is 8% and is expected to increase to 14% by 2027.” This is an unstoppable trend that no country, not even the United States, will be able to stop. However, Trump can ‘encourage’ Apple to manufacture more in the United States instead of China with his policies, one of the factors that would raise the price of its devices.
What will happen to the antitrust proceedings?
Although the separation of powers is part of the pillars of any democracy, observers of the US market do not rule out leaks of interests from the executive to the judicial sphere. Anything can happen. In that sense, technologist Enrique Dans, professor at IE University, believes that the Trump administration could modify the current approach to antitrust regulation, with changes in the Federal Trade Commission and the Department of Justice. “Antitrust proceedings against companies like Amazon, Meta or Apple could be affected or even slowed, although companies like Google or Meta could face continued and more intense scrutiny due to Trump’s negative perception of those companies,”
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