(Preview) What Trump 2.0 Could Mean for Tech, Questions on Antitrust, EU and Growth, Elon Musk and the Election

Looking to President Trump's first term for clues about what tech policy might look like for the next four years. Topics include: Apple's balancing act with the U. S. and China, why Meta and Google might have fared better under Kamala Harris, the implications for "Little Tech," an open question on M&A policies, unresolved tensions with EU regulators, TikTok, crypto policy, the case for growth, and thoughts on Elon Musk and the role that X played in the election.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

  Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing?

• 0:19Ben Thompson?

  I'm doing okay, Andrew. How are you? It's sort of a slow news week. Not much going on.

• 0:23Andrew Sharp?

  Yeah, everyone on the internet very, very relaxed over the last couple of days. I'm doing well. It's good to see you. Good to be here. And yes, for anyone who hasn't heard, the United States has a new president-elect, Donald Trump.

• 0:36Ben Thompson?

  I do have a question. Is it president-elect President Trump?

• 0:41Andrew Sharp?

  Uh, that's a very good question.

• 0:44Ben Thompson?

  I was gonna make that joke in the newsletter the other day, but I figured number one, maybe just not the right time in general. And number two, it'd probably be funnier to talk about the podcast because it does, it rolls off the tongue actually surprisingly well.

• 0:58Andrew Sharp?

  Well, I don't know if it does roll off the tongue. President-elect President Trump.

• 1:03Ben Thompson?

  No, it's got a little bit of a monotonic sort of rhyme scheme to it, but monotonic? What's the word?

• 1:09Andrew Sharp?

  Well.

• 1:09Ben Thompson?

  That's not the right word.

• 1:10Andrew Sharp?

  Monotonic?

• 1:11Ben Thompson?

  No, there's some, there's some poetry-related word that I'm completely failing at, but anyhow.

• 1:15Andrew Sharp?

  The point is, President Trump is president again as of early Wednesday morning. And we're here and we're going to talk through some of the implications for tech as well as tech's role in what just happened. But I want to start, Ben, with a tweet from Tim Cook on Wednesday. Tim Cook says, "Congratulations, President Trump, on your victory. We look forward to engaging with you and your administration to help make sure the United States continues to lead with and be fueled by ingenuity, innovation, and creativity." Wonderful sentiments there.

• 1:51Ben Thompson?

  He didn't mention manufacturing, but uh.

• 1:53Andrew Sharp?

  Well, look, they could always give it another go with the Apple facilities in the United States. I just, I love Tim Cook in general lobbying Trump there. Downstream from our basketball conversation on Monday, with Tim Cook specifically, I imagine him as the picture of Joe Dumars, where he's holding the two phones, and on one phone, he's got Trump, and on the other phone, he's got Xi, the hardest working lobbyist in the business. But in honor of Tim Cook, what are your thoughts on how a Trump presidency could affect big tech companies? Because you hit a number of different elements of the industry analyzing the potential implications. So let's start with big tech.

• 2:35Ben Thompson?

  Yeah, well, I think just sort of zooming out to put what we're doing in sort of context is, you know, we're not a political site, we're not a political podcast. There's been plenty of content in that regard. I think we might talk a little bit about the form of content. That's something I'm very interested in. And in this case, like, why, if we don't talk about politics, we're talking now, well, because the political choice was made. And now it's just like, there's clarity about what to analyze. It's not sort of what-if scenarios. And the what-if scenario bit, I think, is actually particularly interesting in this case, because at the end of the day, Trump was already president. And I think there's stuff that will be different for lots of different reasons. But if you're

• 3:19Ben Thompson?

  doing a sort of like, like, if you have like, sort of your core assumption, you're doing some sort of like Bayesian prediction about what's coming, you should start with what already happened. And so that was where I grounded my analysis in the update, where I would ground what happened now, is actually, let's start by figuring out what happened before, and then figure out what might be different, sort of in different ways. So in Apple specifically, Tim Cook made a lot of people mad, but I think a lot of shareholders happy in the way he very effectively manages political relationships. Like, he's a maestro. To your point, it is arguably his single greatest skill. And that was demonstrated

• 4:01Ben Thompson?

  very adroitly, sort of over the last eight years in particular, where on one hand, he has to get along very well with the Chinese government, he has all those factories there. And, you know, people, I, for a long time, was on the, every time the US did something to a Chinese tech company, I'm like, oh, this might be bad for Apple. I didn't fully appreciate the extent to which Apple is good for China. Like, they employ a lot of people. They are moving capabilities abroad, but their core, they can't, they, they still really need China. Right. And, and there's a bit where to just pull up everything, root and branch, would be so catastrophic financially and for their products that it would actually, it would be fiduciary reckless.

• 4:46Ben Thompson?

  And, and so the alternative is you have to manage that and you, you have to be willing to be a showpiece for, look, you could make really great stuff in China and, and you can have really strong operations and all those sorts of things. And yes, you have to be on the board of their preemptive business school or whatever. And you have to go there and talk about Chinese innovation and do X, Y, Z. And Apple has done that and has played it well and has by and large not been a factor or a piece in.

• 5:14Andrew Sharp?

  A target. Yeah.

• 5:15Ben Thompson?

  Yeah.

• 5:16Andrew Sharp?

  Exactly.

• 5:16Ben Thompson?

  From the Chinese government.

• 5:17Andrew Sharp?

  I mean, the, the aspect of it that I did not fully appreciate until talking to Bill Bishop and looking closer at it for Sharp China. They do just employ a staggering amount of people between Apple and then the Foxconn factories. It's like cities worth of people.

• 5:33Ben Thompson?

  But all the suppliers, like there's entire suppliers.

• 5:36Andrew Sharp?

  Components and everything like it's a big deal and it does sort of insulate them from blowback at least to date it has.

• 5:43Ben Thompson?

  Yeah. And, and they pay taxes and they're like all the sorts of things that, that, that, that makes a difference. Like China needs Apple just as much as Apple needs China. And, and there's a bit there about.

• 5:55Andrew Sharp?

  China has an employment crisis right now. So they don't want to upend what Apple's brought to the table.

• 6:00Ben Thompson?

  I mean, a lot of people who find it easier to leave have left or are, are setting up the process of leaving. I was talking to a friend who has, you know, very strong sort of operation in China. And in some respects, business is better than ever because the, the factory town they're in is empty. They're the only ones that are there. Everyone else has left. And so they have the pick of the litter as far as sort of employment options go and employees don't want to go anywhere. But like there's, but to your point, people who stay are, have, have real advantages.

• 6:32Ben Thompson?

  The problem is Trump has, is particularly this tariff question. You know, so, so this is where Tim Cook played the US side very well. Trump comes along, imposes tariffs on China during his first administration, and all the Apple products were basically exempted from that tariff. Like, that's a total political victory for Tim Cook. There's just no other way to spin it. And there's a bit about, the tariffs were actually, I think, the geopolitical implications of the tariffs in the first Trump administration are, I think, by and large, underappreciated. In that, you know, tariffs, for a lot of stuff, prices is going to get passed through, and yet it had basically no impact on the US economy. The US economy was doing extremely well.

• 7:17Ben Thompson?

  The tariffs are put on, nothing happens to the US economy, and meanwhile China's economy got hammered. Because, you know, and part of this is just a real imbalance. People talk about the trade imbalance, but imports are such a relatively small portion of the US economy. Like, import, like, I want to say like 10% or something like that, and China's like half that or something. I don't remember exactly the numbers are, but relatively speaking, it's very small. Whereas exports are like 50% of the Chinese economy, and a huge portion of that is to the US. And so, I think actually that move was positive for peace in a weird way, because it was kind of like a wake-up call to China that, like, there's a real imbalance here, where if trade just got cut off,

• 7:59Ben Thompson?

  you know, everyone, because the US, people get a, a, a mis-sense of the US because our media is so loud, and because the US, the internet is US-dominated, and English-speaking is the sort of lingua franca of the world, as I use a non-English sort of word and probably butcher it, that people, you know, and so you, you get this sense of US pathologies get sort of put online, right? And so it's like, oh, the US, so you're online, there's huge, the US is so dependent on China, we killed our manufacturing, and everyone's like, wow, the US is really weak, that China must have them by, by the, the vulnerable parts. And, and then, and that's why, and so you, you sort of like-

• 8:38Andrew Sharp?

  Family-friendly show here, a jet tech.

• 8:40Ben Thompson?

  And so you buy into the rhetoric, and so the- These tariffs happen and nothing happens to the US and China is devastated, right? And it is, and so it's a real sort of wake like it's a reality sort of wake up call in that regard. Now that

• 8:50Andrew Sharp?

  This will hurt you more than it'll hurt us.

• 8:52Ben Thompson?

  That's right.

• 8:52Andrew Sharp?

  Absolutely.

• 8:53Ben Thompson?

  And so that now that obviously inspires and you can speak more to this. You guys talk a lot about this on Sharp China. China's efforts to somehow diversify away from that, whether to build different financial regimes, ideally outside the US dollar, you know, these the stronger relationship with Russia and having other markets and things along those lines. At the end of the day, though, they're not going to run a reserve currency. They're like, so stuff's going to continue to be dollar denominated because there's real sacrifices that come with doing that. And the, uh, and you know, they're, the stimulus question is a very complicated one, but if they don't develop real meaningful demand in their consumer market, they're going to remain super export sort of dependent. And, and this goes back to the nineties and like the great bet.

• 9:37Ben Thompson?

  We're living the great bet, which like these, we're going to make China so integrated economically. The first part of the bet that they will become democratic. Obviously that didn't happen, but part two is countries that are so deeply linked don't go to war. Now, again, we'll see how well that actually works out. But if you want to feel good about the relationship, no matter what, it is grounded in this sort of reality. And Apple is on the cutting edge of this, like they are just sort of the showpiece for the depth of this relationship. We talk about the fact Apple can't really extricate itself from China. That is a stand in for the relationship in general and the extent to which the two countries

• 10:22Ben Thompson?

  can't extricate themselves from each other. And, and at the end of the day, what that has played out for Apple is people like me earlier in the Trump's run before I sort of wizened up to it being like, oh, oh, this might be for Apple's way better. And Apple's just fine all the way through because they're so essential to both sides. Now, Trump's now blanket tariff on China, everything, whatever. And it's like 60% or something like that, right?

• 10:46Andrew Sharp?

  Why? And we have no idea whether Apple would be potentially exempted from that. I mean, do we? I, I haven't

• 10:51Ben Thompson?

  No, we don't.

• 10:51Andrew Sharp?

  Heard him address that.

• 10:52Ben Thompson?

  Right, no. Now, now the, the thing with Trump, and you see this, I think, again and again, is I mean, it's cliche, but there's so many things he says that make more sense in the context of he likes to make deals, right? The art of the deal, that sort of thing. And how do you negotiate a deal? You ask for the moon, when in reality, you'll compromise for a streetlight. And so, and so the, the, you know, when you're out there-

• 11:20Andrew Sharp?

  That's what it's, it's a struggle. The tariff question specifically has been a struggle for me because I can understand the argument for 60% tariffs across the board, but I also can't really get a sense for how serious the proposal is, or whether it's an aggressive negotiating tactic that will help, you know, secure a better arrangement for US trade long-term.

• 11:43Ben Thompson?

  Right. Well, you know, again, this is where it's hard to almost like constrain this conversation because you get into the dynamics of having the reserve currency and what that means for why stuff ends up going abroad and like all the interplay of reserve currencies and debt and all these sorts of pieces that go into it.

• 11:59Andrew Sharp?

  China may screw around with the UN as a response to any of these tariffs also. So, yes, a lot to speculate on right now.

• 12:06Ben Thompson?

  Well, but they're constrained by their, by their own sort of domestic economy, sort of in that, in that regard. And they're most concerned about capital flight. And so there's like, there's, you know, so all this, it's deeply sort of interconnected and interrelated. And yet, like I said, with Trump, you have to assume everything's a negotiation. So, I'm not going to make pronouncements on the implications of tariffs if there will or will not be exceptions, other than to say, Tim Cook is gonna earn his money, right? He's gonna have to go there and make the case.

• 12:34Andrew Sharp?

  Yeah.

• 12:35Ben Thompson?

  Yeah, because, because Trump's gonna say, look, why don't you just make it in the US? They opened that Mac Pro factory in, in Texas or whatever, that Trump got to go there for the photo op and-

• 12:44Andrew Sharp?

  Yeah, that's what I was referring to earlier. The MacBook, the MacBook Pro, or what was it? A Mac factory?

• 12:50Ben Thompson?

  The Mac Pro. Yeah, no, the Mac Pro, the sort of, the lowest volume sort of beast. And I think they lost tons of money on doing that.

• 12:56Andrew Sharp?

  Yes.

• 12:56Ben Thompson?

  But, but this is, this is the contextual thing. The Apple almost certainly lost a ton of money with that factory. And yet, to the extent that factory and having that photo op with President Trump meant their products got exempt- From the Chinese tariffs, it was the single best investment Tim Cook made.

• 13:13Andrew Sharp?

  Loss leader that made a lot of sense for them.

• 13:15Ben Thompson?

  Right. And so, you know, we'll get to, we might get to Elon Musk and his Twitter purchase later on. But, you know, like everything, the relative value of everything changes depending on your perspective. And that certainly applies to the Apple factory there. So all this is to say, the Apple question, it looms very large. It's the hardest to predict. So, but here's, here's the thing, if we're going to follow our principle of go back to the first Trump administration. In the first Trump administration, Tim Cook and Trump got along very well. Apple products got exempted from Chinese tariffs and Apple made, you know, gave signs and symbols that were, were committed to the US. And by the way, they have diversified their, like AirPods are made in like Vietnam now.

• 14:00Ben Thompson?

  And like, I think this is the first time that the leading edge phone was made in India. But they can also plausibly go to China and say, look, we're still dependent here. Everything, everything core is made here.

• 14:09Andrew Sharp?

  Every component is being made here. Yeah. And it's being assembled in third party countries. Yep.

• 14:15Ben Thompson?

  I don't know what's going to happen. And on this case in particular, I'm going to settle on, let's assume what happened the first time is going to happen the second time. Apple's probably going to skate through. Uh, they're probably going to be exempted. If they get tariffs, maybe it's going to be a little lower. And so that's, that's my guess there. But again, especially if you assume that the whole tariff rhetoric is all a negotiation. It makes it particularly hard to figure out what, what, what's sort of going to happen.

• 14:39Andrew Sharp?

  Okay. So any thoughts on Google's prospects, Meta's prospects and the prospects for just big tech generally?

• 14:47Ben Thompson?

  Well, so this is

• 14:47Andrew Sharp?

  Under a Trump administration.

• 14:49Ben Thompson?

  So this is sort of point number two. Um, people talk about the Biden administration's antitrust approach. Um, that is, this is actually another area. There's a, was a lot of commonalities in the Biden administration, the Trump administration.

• 15:03Andrew Sharp?

  All right. And that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes, or you can also go to sharp tech.fm. Either option will get you access to a personalized feed that has all the shows we do every week. Plus lots more great content from Stratechery and the Stratechery Plus bundle. Check it out. And if you've got feedback, please email us at email at sharp tech.fm.