A second Trump presidency would be disastrous for the tech industry

This post was slightly delayed because I've been sick all week from my Covid/Flu shots. Apologies!

Hi there! While the halls of America's best and brightest billionaire owned newspapers shuffle their feet wondering if capitulating to a fascist is a good idea, you can rest assured that that bullshit won't grace the revered pixels of Arachne.

This newsletter, and the person who writes it, is so vehemently pro-democracy that (gasp) he is willing to say it publicly. Seeing as it's unclear who gets what first amendment rights under a Trump presidency, I seek to honor the legacy of people who had it way worse than I did and still said whatever their version of a Thursday newsletter written from their couch was.

Donald Trump and his cronies are fascistic losers who are telling us out loud that they plan to deport upwards of 13 million immigrants, restrict medical access, and completely dissolve the power of the federal government to, uh, do things. So, beyond all of the heinous, racist horseshit Trump is empowering a legion of America's worst law school graduates to put in action, let's talk tech. In no particular order, here are some ways a Trump presidency would be horrific for tech in this country and potentially set back our global advantage while hurting consumers.

Chevron

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. was a Supreme Court case that set an incredibly meaningful precedent in the litigation of issues related to government agencies. You may have heard of it in the last year, since it was overruled by the current SCOTUS this past summer.

Here's my incredibly basic understanding of how it worked: When interpreting language used in the legislation or policy that empowered a government agency, the courts would "defer" to the agency's interpretation of that language when making rulings. If you think about it, this makes sense. People hired by or appointed to the EPA or the FDA (you hope) have greater expertise on their field of regulation than some random appellate court judge might. But the recent overruling said "actually, forget that."

So, in theory, lets say one of Trump's biggest donor cheerleaders was a man who owned an electric vehicle company and a space exploration company with multiple government contracts and under multiple regulatory bodies. Let's also say that that man wanted to build a car that could, say, drive on its own. This hypothetical individual could bring a case against, say, the National Highway Traffic Safety Administration that certain policies it enforces about automobile safety are too restrictive on innovation, or whatever. He could, say, bring that case up in Texas or Florida where his businesses operate, find a favorable judge, and successfully challenge the NHTSA. In the past, the precedent would have been for this judge to defer to the agency's interpretation of their regulations.

Now you may be wondering: Hasn't SCOTUS already made this decision? It doesn't matter who is in the White House if this precedent has already been changed! And you bring up a good point. But consider the following.

The Executive Branch not only appoints who runs these critical government agencies, but also judges who might decide the cases brought against them. Trump spent his presidency appointing dozens and dozens of compliant losers to benches across the country, including, obviously, the Supreme Court itself, who are still presiding. Under a second Trump Presidency, you could have someone who thinks pasteurized milk is bad for you running the FDA. So even before legal challenges get to a favorable court, the government agencies could just roll over. And if they don't, a judge who is more interested in glad-handing Trump than in protecting consumers may disregard established understanding of policy to rule in the challengers' favor.

We have multiple government agencies that interact with the tech and media spaces, the NHTSA is one, so is the FCC, so is the SEC, so is the DoE. While, yes, these agencies have done things in the past that I would not describe as favorable to regular people, a landscape in which companies get to gleefully decide whatever they want to do is not a good one for consumers.

Taiwan

The global battle over chip manufacturing and why the US is trying to stop China from buying machines from the Netherlands

Laser beams and plasma hotter than the Sun have heated up the chip war. Professor Chris Miller explains what’s happening.

The VergeNilay Patel, editor-in-chief of the Verge, host of the Decoder podcast, and co-host of The Vergecast.

The vast majority of the globe's semiconductors are made on one island in the China Sea whose sovereignty is contested. Taiwan. While attempts have been made to diversify the global chip supply chain, especially since the pandemic disruptions, the fact remains that TSMC manufactures upwards of 95% of the world's chips.

For an insanely brief bit of global geopolitics, China is insistent that Taiwan is actually part of China. Taiwan is insistent that it, uh, is very much not. This has become an increasingly tenuous situation as Xi Jinping, China's authoritarian leader, has indicated that he'd really like to upend the status quo and #JustDoIt, claiming Taiwan as China's own. I cannot understate how bad this would be for the global tech supply chain, and how much it would primarily impact American tech companies.

Ignoring for a minute the dramatic advantage China would gain in developing its surveillance state and boosting its trailing AI industry, an action like this would choke American tech companies - I'm thinking of Apple and Nvidia - of their ability to manufacture the chips consumers use in their phones every day, cloud software companies use to support their data centers, and AI companies spend millions on to improve computing power.

Donald Trump could ‘discard’ Taiwan, if elected to the White House, claims China

China’s government suggested that Donald Trump might discard Taiwan if he wins the U.S. presidential election, referencing his ‘America first’ stance. Trump has claimed Taiwan should pay for protection and accused it of stealing American semiconductor business. Taiwan’s officials have chosen not to comment during the ongoing U.S. election campaign.

Economic TimesReuters

Donald Trump? He seems to think that Taiwan is "stealing" the US chip manufacturing industry (wasn't much to steal in the first place!). He also has not demonstrated any meaningful departure from the positions held by East Asia's cadre of authoritarians, including Xi, Vladimir Putin, and Kim Jong Un, who all would be super chill with China taking Taiwan.

I need to make this excessively clear: The United States does not have the facilities, the personnel, nor the investment to supplant the bedrock stability for the chip industry that Taiwan supports. If Trump got into office, said he was done with Taiwan, and said we'd do it ourselves, this would crater the American tech industry and supply chain. Even the mere suggestion of it would damage us.

Anti-trust, pro-competition

The current chair of the FTC, Lina Khan, is perhaps America's most litigious and offense-minded consumer representative.

In coordination with Biden's DOJ, Khan and the FTC have brought cases against Google, Apple, and more. If you've read my newsletter before, you know I am a vocal supporter of reining in the monopolistic practices of big tech companies. I believe that Google and Apple should be made to break up in order to protect consumers from the downstream effects of monopoly and in order to bolster competition in our tech industries.

Needless to say, a Trump appointed DOJ and FTC is unlikely to go after these large corporations with as much fervor. Republicans don't ~do~ that sorta thing. Where they might go after these companies is in the bad faith accusation that they are engaged in some large scale collusion to "censor" right wing ideas online.

The hellscape of subscriptions, data non-privacy, and price increases we see across industries is the result of dramatic corporate deregulation that began under Reagan and continues to this day. For the first time in my life, we have an administration willing to do the work of advocating for consumers, smaller business owners, and workers in the tech industries. No one presidential term could undo generations of the laissez-faire inaction, but a second Trump presidential term almost certainly would edify that inaction for another generation.

Tariffs

So. Much has been said about Donald Trump's basic misunderstanding of how tariffs work.

Here's my 11th grade APUSH understanding of tariffs. When you import something into our country, sometimes the government may enforce a little fee that serves as a kind of reparation for not having grown or manufactured that good in the States.

So like if your American company needs aluminum or whatever for manufacturing a washing machine, you can either get it domestically or from abroad. Since you're trying to improve your margins, you're gunna buy whichever aluminum is cheapest to get to your American factory. It could be that shipping the metal across the Pacific is cheaper than getting it domestically. But! The government is beholden to the good people of America who have aluminum jobs and aluminum money. So! They place a tariff on the import to raise the price of doing business overseas.

The thing that Donald Trump doesn't seem to understand or is willfully obfuscating is that the overseas aluminum supplier does not "pay extra." A tariff is not a tax that goes into the coffers of American businesses or the Fed. That supplier may lose the business because the importer doesn't want to pay more than is necessary, but it's not like he's "getting China to pay us back" or anything even remotely like that.

If Trump went so far as to place these enormous tariffs on the import of foreign goods, the cost would almost certainly be passed on to the consumer. You think Apple is going to compromise its margins on its goods from India, Vietnam, and China?

Now you might argue that this isn't the point. The point is to incentivize domestic American supply chains, thus keeping dollars here in the States. But the fact remains that American does not have these businesses. We do not have iPhone manufacturing capacity for yearly iPhone debuts. We do not have steel mills to support all of America's needs. We do not have the workers willing to do manufacturing jobs. We do not have the lenient human rights policy that allows for horrific mistreatment of employees. Enabling these things would require dramatic authoritarian schemes on par with a Stalin five year plan. It would probably require immigrant labor willing to work for less than American born workers. And the ridiculous recursive stupidity continues.

I am not an economic professional. As cited in this very post, I am reaching into high school civics classes for my understanding on certain topics. But that does not change what is glaringly apparent about Trumps plans and how they would impact the tech industry.

This is not Arachne's formal "endorsement" or whatever of Kamala Harris. Lord knows there are things about the current administration I don't vibe with when it comes to democracy, technology, and media. But hopefully amidst a landscape of horse race politics coverage and hyperbole, you can see why it's important to think about what Trump is saying he is going to do. If he does what he is saying he is going to do, we will have bigger problems than just tech supply chain issues, corporate monopoly, and consumer prices.