Trump’s campaign was light on tech policy but focused on issues that will affect Silicon Valley, including immigration and trade. In theory, a few of Trump’s other policies could benefit the tech industry, including corporate tax cuts and increased spending on infrastructure.
Still, tech leaders have reason to worry about Trump’s attitude toward their industry, despite the addition of tech billionaire Peter Thiel to his transition team. Trump has attacked major tech companies, calling for a boycott of Apple (AAPL) in the wake of its feud with the FBI over unlocking an iPhone, stating he would make Apple build its devices in America instead of China, and arguing Amazon (AMZN) has a “huge anti-trust problem.”
His controversial comments raised red flags among many in the tech community. This July, for example, about 145 technology leaders, including Apple co-founder Steve Wozniak, Yelp CEO Jeremy Stoppelman, and Wikipedia founder Jimmy Wales, signed a letter condemning the president-elect’s candidacy. In the letter, they argued Trump would be a “disaster for innovation.”
In reality, it’s possible a Trump administration may not be entirely bad for those in the Valley. Trump, for example, has said he plans to transform the country’s infrastructure and create jobs in sectors such as telecommunications.
“Most everything these days that’s done, whether it’s industrial, or manufacturing, involves technology,” John Canally, chief economic strategist at LPL Financial, told CNBC. “And I think the sector that’s benefiting the most is financials. The financial sector is the biggest spender on tech. So tech’s going to benefit there as well.”
Trump also plans to bring new technologies into areas like the transportation system, theoretically spurring innovation. Trump’s campaign promised to “incorporate new technologies and innovations into our national transportation system such as state-of-the-art pipelines, advancements in maritime commerce, and the next generation of vehicles.”
Trump’s corporate tax cuts and paring back of regulations could also benefit big corporations including big tech. The Angel Capital Association, a North American trade association of investors and investing groups, has said having a businessperson such as Trump running the White House could push the Securities and Exchange Commission to reinterpret laws to cut down on red tape.
Moreover, Trump’s plan to reduce corporate tax rate from 35% to 15% is intended to invigorate US business, enabling tech companies to expand and develop products and services more quickly. Such a tax cut could also render the US a more attractive place for multinational companies to set up shop.
In the case of Apple, which is headquartered in Cupertino, Calif., but has operations in locations as far flung as China, the tech giant could benefit from Trump’s pledge to offer a lower, 10% tax on any overseas cash brought back to the US. Morgan Stanley Managing Director Katy Huberty recently wrote a report that Apple would likely pay $54 billion less in taxes if a tax holiday occurs and the company opts to move all its cash to the U.S.
Of course, these are all hypotheticals and promises for now. Trump: a disaster for innovation? Feasible. But it may very well also mean the next four years won’t be wholly doom and gloom for tech’s innovators.
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