(Preview) What Trump 2.0 Could Mean for Tech, Questions on Antitrust, EU and Growth, Elon Musk and the Election
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Hello, and welcome to a free preview of sharp tech. Hello and welcome back to another episode of sharp tech. I'm Andrew sharp. And on the other line, ben thomson.

Then how you do IT i'm doing OK Andrew, how are you sort of slow news week? Not much going on yeah everyone .

on the internet very, very relaxed over the last couple 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, at the elected president. Is that a president .

or elected president front?

That's a very good question.

I was going to make that joke. I was going to make joke the news letter the other day, but I figured that wide baby just not the right time. In general, you probably fine you to talk the podcast because IT does IT rolls off the tongue actually surprisingly well.

Well, I see I don't know if he does roll off the tongue. President elect.

president truck got a little bit of botox sort of drive scheme to IT. But I tonic with the word, well, that's not the right tonic. I know there there's some poetry really where that i'm completely fAiling out.

but the point is president drop 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 text role in what has happened. But I want to start bin 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 fuelled by ingenuity, innovation and creativity. Wonderful sentiments there.

You didn't mention .

manufacturing. Well, look, they can always give IT another go with the apple facilities in the united states. I just, I love him. Cook in general lobby trump there. A downstream from our baseball conversation on monday.

I 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 SHE the hardest working lobbies 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.

Yeah, I think just sort of zoom ing out to put what we're doing in sort of context, is you we're not a political site or not a potent podcast there. There has been of content in that regard. Think we might talk a little bit about the form of content that something i'm very issued in.

And in this case, like why why if we don't tell about talking 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 are stuff that will be different for lots of different reasons.

But if you're doing a sort of like if you have like some of your core assumption, you're doing some sort like basic and 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 growd what happened now is actually, let's start by figure out what happened before and then figure out what might be different sort of in different ways. So in in, in apple specifically, tim cook made a lot of people mad, but I think a lot of shareholders is happy in the way he very effectively manages political relationships like he's a my stroke. To your point, IT is arguably his single greatest skill.

And that was demonstrated very a roughly sort of over the the last eight years in particular, where on one hand he asked to get along very wealth chinese government. And he has all those factors there. And you know, people I for a long time was on the every time the U.

S. Did something to a chinese test company like, uh, all 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 they're core. They can they still really need china, right? And and there's a bit where to just pull up everything. Root branch would be so catastrophic financially and for their products that IT would actually be fiduciary reckless.

And so the alternative, you have to manage that and you have to be willing to be a show piece for what you can make really great stuff in china and and you can have really strong Operations and all those things. And yes, beyond the board of their permanent business school or whatever, you have to go there and talk about chinese innovation and do xyz. And apple has done that and has played well. And as buying large not been a factor or a peace in argument .

from the point the the aspect of IT that I did not fully appreciate until talk IT a bill bishop and looking closer at IT for sharp china, they do just employ a staggers amount of people between apple and then the fox conceptor ies.

It's like cities, not just people, but all the suppliers like this, entire supply .

components and everything like it's a big deal. And IT does sort .

of millions of people and they pay taxes and they're all the source of things that that that makes a difference, like china needs apple just as much as apple needs china. And and there's a Better .

of unemployment crisis right now. So yeah, and I bend what apples bread to the table.

I made a lot of people who find IT easier to leave have left or or or setting up the process of leaving. I was talking to a friend who has your very strong or vo person in china. And in some respects, business is Better than ever, because the factory town there in is empty.

There are 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 to want to go anywhere.

But like there's but to your point, people who stay have have real advantages. The problem is trump has is particularly the terf question also so this is where tim clock played the U. S.

Side very well. Uh, trump comes along, imposes terrorists on china during his first administration and all the apple products were basically a exempted from that terf like yeah that's a total political Victory for tim cut. There's just no other way to spin IT.

And there's a bit about the terrace were actually, I think um the geopolitical implications of the terrorists and the first truck administration are, I think by and large, under appreciated in that you know terms for a lot of stuff Prices is going to have pass through and get IT. Basically no impact on the U. S.

economy. The U. S. Economy was doing extremely well.

Terms are put on. Nothing happens to the U. S. economy. And we will. China's economy got hammer because that you know in part of this just a real imbaLance.

People tell about the trade imbaLance, but imports are such a relatively small portion of the U. S. economy.

Like, like import, like, like, I want to say, like ten percent of that. They like that in chinese, like half that. Something I don't remember is that the numbers are, but relatively speaking is very small. Where's exports are like fifty percent of the chinese economy and a huge portion of that is to the U. S.

And so I think actually that move was positive for peace in a weird way, because he was kind of like a wake up call to china that like there's a real imbaLance here where if trades got cut off, everyone, because the us. People get A, A, A missenden of the U. S.

Because our media is so loud and because the us. The net is us dominated. An english speaking is the sort of lingua franca of the world as a user, not english or of word, and probably butcher IT that people you so you get this sense of U. S.

Pathologies get sort of put online, right? And so it's like, go the us. So you're online. There's useful to us so dependent on china, we kill LED our manufacturing and levs like well, the us. Is really weak that the china must have them by the the vulnerability and and then that's why so you sort of like friendly show here.

yes.

so you buy to the rhetoric. And so these terrors happened and nothing happens to the us. And china is devastated, right? So it's a real sort of wake, like it's a reality sort of wake up.

Call guard, now this will hurt you more .

than it'll heard us that ability and that obvious ly inspires and speak more china's efforts to somehow diversify away from that, whether to build different financial regimes. I deal outside the us stolar this strong relations with russia and having other markets and things on those lines at the other day, though, they're not gna run to reserve currency like.

So stuff is going to continue be dolin be because there's real sacrifices that come with doing that. And the ah and you know the the stimulus question is a very complicated one, but if they don't develop real meaningful demand in their consumer market there get to remain super export sort of dependent. And and this goes back to the nineties.

And like the great bet, we're living the great bet which like this, we're going to make china so integrated economically. The first part of bet that they will become declared, obviously that didn't happen. But part two is countries are so deeply link to go to war. Now again, i'll see how well that actually works out.

But if you want to feel good about the ation, 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 show, peace for the death, this relationship we talk about, the fact apple can really extricate itself from china. That is a standing for the relationship in general and extent to which the two countries can't extricate themselves for each other. And and at the end of the day, what that has played out for apple is people like me earlier.

And shirker is run before I sort of wise and up to IT being like, oh, this might be rap. So apple just fine all the way through because they're so essential to both sides. Now drops, now blanket, terrifying. China, everything, whatever. IT is like sixty percent .

or something like that, right? right? And we have no idea whether apple would be potentially exempted from that.

I mean, do we I, mp, and you see this, I think again and again is, I mean, it's good, but there are so many things he says that make more sense in the context of he likes to make deals, right, to do 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 compromise with four street light. And so so the the it's a .

struggle. The tariff question specifically has been a struggle for me because I can understand the argument for sixty percent tariff s 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 we know secure a Better arrangement for U. S. Trade long term. right?

What you you this is where it's hard to almost like constraint this conversation because you get into the dynamics of having the reserve currency, you in what that means for my stuff ends up going abroad. And like all the the interplay of reserve currencies and debt in all these sorts of pieces that that go .

into IT screw around with the U N. As a response to any of these tariff. S also, so yes, a lot to .

speak well are constrained by by their own sort of domestic economy of in that regard, most concerned about capital flight. And so like there is so all this is deeply sort of interconnected and interrelated. And yeah like is that with trump you have to assume everything and negotiation.

So i'm not going to make pronouncements on the implications of terrorist s if there will or will not be exceptions other than to say tim cook is gonna as money, right? He's going to have to go down and make the case yeah because going to say what why don't just make the U S. They open that mac pro factory in in taxes or whatever that trump got to go there for the photo op.

And yes, that's what I was referred to earlier. The the macbook pro at .

the mac pro make pro the west volume sort of bees, and I think was tons of money on doing that. But but this is, this is the contextual thing. The apple almost certainly lost a tony money without factory. And yet, to the extent that factory and having that photo up with president truman met, their products got exempted from the chinese terrify. IT was the single best investment to cook .

made loss leader that made a lot of sense for them.

right? And so, you know, we get to I get to eat on bosket this twitter purchase later. Od, like everything, the relative value, everything changes depending on your perspective.

And that certain ly applies to the apple factory there. So all this is to say the apple question IT looms very large. Uh, it's the hardest to predict.

So but here's here's a thing, if we're going to follow our principal of go back to the first trump administration. In the first trump administration, tim cookin, trump got along very well. Apple Price got exempted from chinese terrorists.

And apple made, you know, gave signs and symbols that were were committed to the us. And by the way, they have diversified like airports are made like now and like I think that is the first time that the weeding as phone was made in india. But they can also plausible go to china and say what we're still dependent here, everything everything .

made being made here yeah it's so sample in third party countries yeah I don't know.

It's onna happen. And on this case of particular, i'm going to settle on let's assume what happened the first time going to happen in the second time, apples probably going to escape through. They're probably going to be exempted if they get tariff s baby, it's going to be little lower. And so that's that's my guess there. But again, it's not if you assume that the whole terra rhetoric is all and negotiation IT makes a particularly hard to figure what what are .

you gonna en? okay. So any thoughts on google prospects, meas prospects and the prospects for just big tech generally, what are under a trumpet administration?

So this is sort of point number two. Um people talk about the by administrations and I trust approach that is this is actually another there's a was a lot of common is in the by administration, the trump administration.

All right. And that is the end of the free preview. If you'd like to hear more from beni, there are links to subscribe in the show notes where you can also get a sharp tech dot F M. Either option will get you access to a personalize feed that has all the shows we do every week, plus lots more great content from protection and the protection plus funder check IT out. And if you've got feedback, please email us at email at sharp tech that at M.