Donald Trump’s victory will be of significance to Big Tech

Implications of the proposed tariffs on global supply chains: Big Tech CEOs congratulate Donald Trump on a new economic stimulus and what they may tell us

On Wednesday, the chief executives of the leading Big Tech companies congratulated the President-elect. While they have sparred with DonaldTrump before, they were quick to support him as their companies face a fresh four years under his rule.

Trump has shown disdain for Big Tech companies, and he’s been vocal about pursuing policies that increase the cost of doing business for Big Tech and subject them to more unfavorable regulations. Ahead of the election, business leaders and venture capitalists expressed concern that an unpredictable administration would undermine the stability of their businesses.

Betsy Cooper, the director of the Aspen Policy Academy, says that this could be a moment in which there is a pick of favorites among the big tech players.

This has raised questions about Apple’s business since more than 95 percent of its hardware products are manufactured and assembled in China; as well as large retailers and e-commerce companies that rely heavily on Chinese materials and components. On Monday the National Retail Federation said US shoppers could lose up to $78 billion in annual spending power if the proposed tariffs were implemented and US companies raised prices to offset their losses.

Bernstein said in a note Wednesday that Apple might be less at risk than the initial reading of these tariffs would suggest. Apple is broadening its supply chain by making products in different parts of the world.

Trump is too afraid to talk about Taiwan, the ugliest enemy of the U.S., and a thorny issue in bilateral relations

Some believe that former Secretary of State Mike Pompeo is among the candidates being considered for a position in the new administration. Pompeo has explicitly called for the U.S. to give Taiwan formal diplomatic recognition – a step that would almost certainly trigger a crisis across the Taiwan Strait.

He says that Trump will probably have to reconcile with others in the Republican Party who don’t like the way the U.S. supports Taiwan.

“We don’t know if he thinks it’s the right thing to do or if he just thinks it’s the wrong thing.” said a scholar in Shanghai. The man wants to use his unpredictability to deter the mainland.

Trump angered China in 2016 by taking a phone call from Taiwan’s president after his election. Taiwan said there were no plans for a call.

Beyond trade, the thorniest issue in bilateral relations will be Taiwan, the self-governed democracy that Beijing claims as part of China and wants to annex.

“And of course, Beijing has mapped out all the congressional districts. They know exactly what industries are where, so if they need to target specific members of congress, they will do that,” Blanchette added.

He said that they would be more comfortable with using a wider range of responses to the U.S. country’s problems, like currency devaluations, punishment of U.S. companies or steps to increase inflation.

“The Chinese are messaging through a number of channels that America should not expect that Beijing will play the relatively careful, calibrated game that they did in the first trade war,” said Jude Blanchette, an expert in Chinese politics at the Center for Strategic and International Studies, in Washington.

“I’m sure Beijing, as many other capitals around the world are now, is in a sort of preemptively defensive position,” said Wang Zichen, author of the Pekingnology newsletter on Substack and a research fellow at the Center for China and Globalization, a think tank in Beijing.

It can be hard not to when it comes to trade in Beijing. Soaring tariffs could put a big dent in exports, which have been by far the liveliest segment of an otherwise sluggish economy.

“Whether I export through China, with the tariffs added to the price for consumers, or through Thailand, where higher costs would result in a higher price, the cost will ultimately be borne by U.S. customers,” he said, adding: “For ordinary business owners like us, worrying about [the U.S. president] doesn’t help.”

Cheng told NPR he’d increase his factory investments in Thailand if a 60 percent tariffs were in place.

But Cheng just shrugs. In 2019, he moved some of his production to Bangkok, Thailand, beyond the reach of tariffs. Many other people in this business in China took the same steps.

Cheng owns a company in China that makes light fixture for export to the United States. The main factory is making an order for over 2,000 illuminated bathroom mirrors.