Five worries for tech under Trump

The tech industry is looking for clues on how President Trump will govern on some of their top priorities.

On many of those issues, Trump has made remarks that have worried industry leaders. In some cases, the new president has offered conflicting views, leaving the tech world hoping for clarity.

Here are five areas where the tech industry is cautiously awaiting the administration’s plans.

 

Trade

Trump has vowed to renegotiate trade deals, including the North American Free Trade Agreement, which he says hurt American workers and threatened big tariffs on imports. He’s also vowed to roll back the Trans-Pacific Partnership (TPP), a 12-nation Pacific trade deal.

That has tech leaders sweating over the possibility they could lose access to huge burgeoning markets abroad, especially China. Trump has long singled out the country, claiming its trade practices are unfair.

Chinese leaders appear to be taking Trump seriously. Chinese President Xi Jinping earlier this week cautioned that a trade war would hurt both countries.

Silicon Valley is taking notice too, worrying that Trump will roil U.S.-China business ties.

“Nobody wants a trade war,” said Qualcomm Chairman Paul Jacobs.

The issue reportedly came up at Trump’s December meeting with major tech leaders at Trump Tower.

Trump tried to calm their fears, claiming he would make “fairer trade deals,” and ease some restrictions on trade.

Dr. Robert Atkinson, President of the Information Technology and Innovation Foundation, a Washington, D.C. tech think tank, said tariffs could be devastating to the tech industry.

“The Trump trade agenda is simply putting tariffs so that work comes back,” said Atkinson. That will be harmful to the tech industry. That’s like using a blunderbuss when you should be using a rifle.”

But many in the tech industry believe China also plays hardball on trade, often to the detriment of American companies. To some, having a tough negotiator in the White House could be a boost.

“If they’re instead using a strategic approach to get China to back off then that could be a good thing for the U.S. tech industry,” he said. “China is cheating to take away global market share from the U.S.”

 

Immigration

Technology companies across the board have voiced a strong desire for comprehensive immigration reform.

In particular, expanding H1-B visas, which bring high-skilled workers to the U.S., has been high on their wish list for years. Tech groups, including FWD.us, lobbied aggressively on the issue.

Trump’s views are unclear, however. At times he’s suggested those visas take jobs away from American workers, while other times he’s floated keeping the visa program in place, but forcing tech to pay higher fees.

Reports after his meeting with tech leaders in December suggested Trump was open to working on expanding visas.

But adding to tech’s worries is Trump’s selection of Sen. Jeff Sessions (R-Ala.) for attorney general. Sessions has been a vocal critic of the visa program. In 2014, he blasted Microsoft for calling for more high-tech visas even as the company made plans to cut U.S. jobs.

In 2015, Sessions introduced legislation that would have placed more restrictions on the visa program.

“Immigration is one [area] that I worry about,” said Qualcomm’s Jacobs to Bloomberg earlier this month, even as he acknowledged that Trump’s stance is a mystery.

“I wouldn’t say that we know enough to disagree, but I think that the American dream and the notion of the melting pot has caused the best and brightest to come to the United States and given us a lot of innovation. That’s a competitive advantage for the country.”

Immigration advocacy group FWD.us, which is backed by Facebook founder Mark Zuckerberg, expressed concern over Sessions’s nomination and views on immigration after a confirmation hearing.

At the hearing, Sessions said he believed then-President Obama’s program deferring deportation for some undocumented immigrants may be unconstitutional.

“[W]ith just days until the new administration begins, it is critical we see real policy solutions put forward,” FWD.us President Todd Schulte said at the time.

 

Privacy rights

Protecting privacy has been a longstanding passion for tech leaders, who say strong privacy practices give their products a competitive edge and help them win over consumers.

But Trump unsettled tech groups and civil libertarians after the San Bernardino shooting. At the time, Trump floated a boycott of Apple after the tech giant refused to help the FBI unlock an encrypted iPhone belonging to the shooters.

The fight united many big players, with competitors Google and Microsoft backing Apple’s stance.

Since then, Trump has said little specifically on encryption but has vowed to be tough on terrorism and called for more support for law enforcement.

His pick to run the CIA, Rep. Mike Pompeo (R-Kan.) has gone further, saying he wants to ease some restrictions on collecting data on Americans.

Those remarks have left many in tech uneasy.

Atkinson said the industry needed to convince Trump that strong encryption made good business sense.

“The challenge for the Trump administration is on the one hand they want good jobs,” he said. “On the other hand … [Trump] has talked about getting tough on terror and strong law enforcement and those things can be in contradiction.”

He warned that a tough stance against encryption, including mandating backdoors for law enforcement, could hurt the industry.

“He could support not just a law that creates a backdoor but also a law that supports intel collection so much so that it could weaken the tech community overseas because they could be seen as tools of law enforcement and security,” Atkinson said.

 

Corporate mergers

Trump’s views on corporate mergers have left many in tech scratching their heads, in particular over the biggest merger on the table: AT&T’s proposed $85 billion deal with Time Warner.

In October, Trump said he’d block the deal, claiming it would concentrate too much power in one company. Reports have suggested Trump still opposes the deal. But last week, Trump said he hadn’t seen all the “facts,” suggesting he could change his stance.

Trump has also taken shots at other big deals, saying he would look into breaking up the already completed merger between Comcast and NBCUniversal. And he needled Jeff Bezos, the founder of Amazon, owner of the Washington Post and a sometimes critical voice against Trump, saying his company has a “huge antitrust problem.”

But despite those remarks, Trump brought on a number of transition team officials who have been far more supportive of mergers. That has many hopeful that Trump’s administration could provide a green light to corporate deals.

Silicon Valley already finds itself facing a number of antitrust challenges abroad, in particular from European Union competition laws, and tech leaders are hoping to avoid new fights at home.

How the Trump team will actually handle mergers and competition policy is unclear, but for now tech companies are wary about what’s ahead.

 

Net neutrality

The fight over the Federal Communications Commission’s net neutrality rules, requiring internet service providers to treat all traffic equally, divided the tech world.

On one side, internet companies including Netflix and Google have backed the rule. Opposing them are broadband providers, who have been vocal critics.

That fight is set to flare again with the Trump administration and congressional Republicans certain to look at ways to roll back elements of net neutrality.

Republican FCC Commissioner Ajit Pai, a longtime critic of the rules, will be Trump’s choice to lead the agency, sources told The Hill. Pai, in a letter written with fellow Republican Commissioner Mike O’Rielly late last year, vowed he would revisit the rules as soon as possible.

It’s unclear, though, how far Republicans would go in changing net neutrality. But both sides in the fight are gearing up.

In a letter to Trump after he won the election, the Internet Association — a trade group backed by Google — urged him to protect net neutrality.

“At its core, net neutrality is a principle that underpins a free and open internet,” the group wrote. “It ensures equal access to content by prohibiting paid prioritization, throttling, and blocking. The internet must be a place where companies can compete on a level playing field.”