Tech industry will see less regulation under Trump
President-elect Donald Trump will likely repeal President Joe Biden's AI executive order and introduce new tariffs that could create problems for companies and consumers.
President-elect Donald Trump's second term will bring less regulation, but potentially more challenges with importing goods should his administration implement additional tariffs. Winners of Trump's deregulation plans include tech industry execs.
Throughout Trump's economic platform, he noted the need for less "costly and burdensome" regulations. His ambitions to reduce regulations are getting support from tech executives including Elon Musk, who campaigned with Trump. On X, formerly Twitter, former Amazon CEO Jeff Bezos wished Trump congratulations on "an extraordinary political comeback and decisive victory" following his election win.
As tech companies face increasing scrutiny, fines and regulatory regimes in the European Union, tech executives might be seeking an ally in Trump -- something they might not have felt they had under President Joe Biden and Democratic presidential nominee Vice President Kamala Harris, according to Sarah Kreps, law professor and director of the Tech Policy Institute at Cornell University. Trump's selection of Sen. JD Vance (R-Ohio), a former tech entrepreneur and venture capitalist, as his running mate also signaled to the tech industry his plan to defend its interests, she said.
"One of the reasons that Trump was attracting high-level people in the tech sector this time in ways that he didn't in either of the previous two elections is that there's been some frustration in the tech industry with the fairly aggressive approach to tech and AI regulation within the Biden administration," Kreps said.
Reducing regulations
Under the Biden administration, the U.S. Securities and Exchange Commission sought to implement new cryptocurrency and climate rules. At the same time, the Federal Trade Commission adopted a ban on noncompete agreements and increased antitrust scrutiny of tech companies.
The Biden administration strongly focused on AI risk and safety through Biden's executive order on artificial intelligence, which laid a path for potential AI regulation in the U.S. The step back from regulation would come when AI experts sounded the alarm on AI's risks.
If Trump is trying to elevate the American economy, it has to be through tech.
Sarah KrepsDirector, Tech Policy Institute, Cornell University
Kreps said bolstering the tech sector by reducing regulations likely ties to Trump's economic plans for boosting innovation and competing on a global scale. Most of the top companies in the U.S. by market capitalization are tech companies, she added.
"If Trump is trying to elevate the American economy, it has to be through tech," Kreps said.
Indeed, Trump recognizes that the U.S. competes with foreign adversaries such as China, particularly on technologies including artificial intelligence, according to Darrell West, a senior fellow at the Brookings Institution, a public policy organization in Washington. West said Trump will likely support the tech industry to bolster the U.S.'s competitive edge.
West noted that Trump "wants the U.S. to have very strong tech companies" and suggested that this goal will likely "guide a lot of his policy thinking."
Repealing Biden's order on AI will likely be one of the first things Trump does when he takes office, West said.
The order directed federal agencies to develop AI safety standards and used the Defense Production Act to require large AI system developers to share safety test results with the U.S. government.
"That was a very comprehensive step in the direction of regulating AI," West said. "Trump already said he will get rid of that."
Deregulation has been a top priority for the Trump administration and will likely continue to be a big part of his broader business agenda, said Daniel Castro, vice president of the Information Technology and Innovation Foundation, a public policy nonprofit in Washington.
"I expect many of these top tech policy issues -- privacy, AI, cryptocurrency -- these will continue to be priorities for the next administration, but it will be very much based on this idea that government needs to be getting out of the way," Castro said.
Implementing tariffs
Trump has discussed implementing a 10% tariff across the board on imported goods and a 60% tariff on goods imported from China. Many U.S. companies operate in China, and Trump's tariffs would have a major effect on global trade, including affecting U.S. relations with allies, West said.
"Many of our electronics are made there, many of the Apple phones are there, a lot of pharmaceuticals are manufactured there," West said. "So, if China wants to retaliate, there are many ways it could do so."
Trump's potential tariffs would negatively affect U.S. businesses, Castro said.
"If these tariffs go through, both consumers and businesses are in store for a world of pain," he said.
Trump will likely face a difficult road balancing the interests of consumers, laborers and businesses, Kreps said. While tariffs might help U.S. laborers, they won't benefit consumers and businesses.
"It may present as an impossible trinity -- that you want to address inflation for consumers, the interest of industry and workers -- but I don't see how he's going to be able to do all three," Kreps said.
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
