Tech and Trump: What to Expect From the Trump Administration (Part 2: Commerce, Misc.)

Last Updated 1/22/17

What does the incoming Trump administration mean for tech and tech policy?  Part 1 addresses the Tech industry’s strained relations with the President-Elect and an analysis on changes in policy to expect at the Federal Trade Commission, Federal Communications Commission and the Justice Department.

Part 2 below addresses how Trump’s policies toward China and a variety of other issues may impact tech.

COMMERCE DEPT/TRADE

Throughout his campaign, Trump was a hard critic of China and its trading practices.  When the campaign gave a speech outlining its economic policy, Trump had this to say about China:

At the center of my plan is trade enforcement with China. This alone could return millions of jobs into our country. They break the rules in every way imaginable. China engages in illegal export subsidies, prohibited currency manipulation, and rampant theft of intellectual property. They also have no real environmental or labor protections, further undercutting American workers. Just enforcing intellectual property rules alone could save millions of American jobs. According to the U.S. International Trade Commission, improved protection of America’s intellectual property in China would produce more than 2 million more jobs right here in the United States.

Trump has assembled a team that is hawkish on trade with China.  This includes Commerce Secretary nominee Wilbur Ross (pictured above center), a billionaire investor from the steel and textile industries, who has battled China on trade and won punitive tariffs against them.

The Commerce Department includes the US Patent and Trademark Office and Ross has made strong statements about the need for zero tolerance of IP infringement.

In addition, the Department of Commerce’s National Telecommunications and Information Administration (NTIA) oversees the U.S. relationship with ICANN.  In September, NTIA transitioned oversight of the internet domain name system root zone and other core internet infrastructure registries (the IANA functions) to ICANN.  Trump opposed transition to ICANN, but it may be too late.

Trump also named Peter Navarro (pictured above right), an economics professor from the University of California-Irvine, author of the 2011 book, Death by China: Confronting the Dragon—A Global Call to Action and producer of the documentary film “Death by China” to head a newly created post – the White House National Trade Council.

In July, Navarro wrote

To those who say Donald Trump will start a trade war, Trump says we are already in a trade war—and it’s long past time we fought back

Trump’s statements and these choices have raised concerns of a potential trade war with China, although Trump has also Iowa Governor Terry Brandstad as his choice for ambassador to China who is viewed as more of a pragmatist.

A trade war could have a significant impact on the U.S. economy and likely would hurt the tech industry which relies on Chinese manufactured components and access to the growing Chinese market.

Trump also opposes the Trans Pacific Partnership Agreement, a regional free trade agreement among the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.  One of TPP’s objectives was to contain China’s influence in the area.  Withdrawing from TPP could lead to a separate Asian trade pact with China at the center.

The new White House website states

With a lifetime of negotiating experience, the President understands how critical it is to put American workers and businesses first when it comes to trade. With tough and fair agreements, international trade can be used to grow our economy, return millions of jobs to America’s shores, and revitalize our nation’s suffering communities.

This strategy starts by withdrawing from the Trans-Pacific Partnership and making certain that any new trade deals are in the interests of American workers. President Trump is committed to renegotiating NAFTA. If our partners refuse a renegotiation that gives American workers a fair deal, then the President will give notice of the United States’ intent to withdraw from NAFTA.

What to Expect

• Friction with China over Trade and IP issues
• Challenges to China at World Trade Organization
• Withdrawal from the Trans Pacific Partnership Agreement.
• Scrutiny of ICANN from Trump Department of Commerce

OTHER ISSUES

• Trump, who is no fan of Amazon CEO Jeff Bezos, favors state sales tax on online purchases.
• Expect continued opportunity for crowd-funding.
• The new expansion of federal overtime rules may face scrutiny from a Trump Labor Department.