The relationship that President Donald J. Trump and his administration has had with the tech industry can be described as tenuous at best, and has recently devolved into feelings of contempt on both sides. Industry leaders such as Apple, Alphabet, Microsoft, Amazon, and Facebook have all joined in protest agains the current administration, which is quite notable given their status as the five most valuable companies in the world today. It is typically unusual for companies, never mind entire industries, to take such a strong stance against the POTUS. So why is tech revolting?
Some say that the aggressive stance taken by these tech giants is primarily for good press. This argument holds true in some respects, especially given the need of tech firms to attract and retain millennial users, who largely disapprove of Trump. However, while the need for good press is certainly real for these companies, I believe that their opposition to Trump runs much deeper. In reality, the policies of the Trump administration run counteractive to the financial interests of the tech industry.
First and foremost, the Trump administration’s immigration policies stand to directly hinder the hiring processes of tech companies, and therefore negatively impact their bottom lines in a very real sense. This is especially harmful given the incredible importance of a diverse and talented staff in Silicon Valley. To quote a legal brief jointly filed by 97 tech companies in response to Trump’s executive order banning immigration from seven (now six) muslim majority countries:
The Order makes it more difficult and expensive for U.S. companies to recruit, hire, and retain some of the world’s best employees. It disrupts ongoing business operations. And it threatens companies’ ability to attract talent, business, and investment to the United States.
While the muslim ban has received the most press, there are several other immigration policies that could hurt tech profits just as much, if not more. For example, Trump recently announced that there would be a temporary ban on expedited applications for H-1B visas. These visas are a major hiring tool for tech companies given the relative shortage of American math and science graduates, as well as the money saved by hiring talented foreign workers instead. Perhaps more concerning than this order itself is the potential for future limits on H-1B visas, especially given this quote from Trump’s campaign from last year.
The H-1B program is neither high-skilled nor immigration: these are temporary foreign workers, imported from abroad, for the explicit purpose of substituting for American workers at lower pay…I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers for every visa and immigration program. No exceptions.
While this President has been known for making fiery rhetoric and then backing down in policy, he is also known as being completely unpredictable. If the administration were to take such action on the H-1B visa program, the potentially wide-reaching impacts of these policies could massacre tech profits in years to come. For more on Trump and H-1B Visas, see this informative video.
While Trump’s immigration policies have the most significant implications for tech companies, there are several other points of contention forming between Silicon Valley and Washington. For example, there has been some unease about the idea of Net Neutrality, which is the concept that the internet should be free and open to all of its users. Without Net Neutrality, a “pay to play” system could be implemented in which internet providers could discriminate online content based on whether or not the content providers pay to be in the so-called “fast lane”. Those who pay more get better online access than those who don’t, therefore destroying the freedom of the open internet as we know it.
This concept has widespread implications across the digital business sector. The free and open internet is the reason why online startups can potentially grow into tech giants. All the tech leaders of today would not have been able to succeed without Net Neutrality, as they would have been crushed by larger companies paying for premium internet exposure. In that vein, the tech leaders of tomorrow may not be able to succeed if Net Neutrality is not protected by the government. While President Trump’s position on the matter is unclear, he has indirectly taken a position against Net Neutrality by nominating Ajir Pai to lead the FCC. Pai is now working to fight a bipartisan set of rules protecting Net Neutrality that passed in 2015.
Finally, President Trump’s aggressive stance in favor of protectionist trade policies have many tech leaders worried as well, specifically regarding potential access to China. The Chinese market is regarded as among tech leaders as an untapped goldmine of profits. The immense amount of people in the region has led several big name firms like Netflix and Facebook to try and gain market share in China, but none have been able to succeed as of yet, leaving the opportunity open for anyone who can crack the code. However, if President Trump acts on his rhetoric and follows through with anti-China trade policies, the opportunity for American tech companies to crack the Chinese market may be over, and a world of potential profits may be lost.
Fundamentally, the conflict between Trump and the tech industry is due to a difference in world views. The position of the Trump administration is to protect America first and to prioritize American needs over the needs of the world. The tech industry on the other hand, is built on breaking down barriers and creating global opportunities. It’s a battle of isolation vs. globalization. Regardless of which ideology you personally agree with, it is important to recognize that this set of conflicting philosophies is the source of the conflict between Trump and tech.