Tech Giants Bet Big on Trump. Where's Their Return?

During President Donald Trump’s inauguration in January, the CEOs of Google, Meta, and Amazon were present. front and center , expressing their backing for the new president who had long criticized Big Tech.

Following Trump’s declaration on Wednesday about expanded tariffs Tech giants face another frontline challenge as they become prime targets for U.S. trading partners seeking methods to retaliate against the American economy through measures involving imports from nearly every nation across the globe.

On Friday, China declared counter-tariffs which particularly featured a significant duty hike on exported products. rare earth minerals critical for the computer chips that drive everything from iPhones to artificial intelligence. The European Union is planning a comprehensive reaction that might encompass direct hits For the biggest U.S.-based internet and software corporations. The sector is preparing for additional repercussions originating overseas, which might encompass increasing energy costs, stringent data privacy regulations, and levies on digital services.

In response to Trump, America’s trading partners "will seek sectors where the US economy excels but have alternative international options," noted an anonymous tech sector lobbyist due to concerns about potential backlash from the administration.

The U.S. tech sector leads that ranking," the lobbyist stated. "We do not come across as a relatable casualty.

Despite lingering optimism in Silicon Valley that Trump might implement domestic deregulation, boost the startup ecosystem through lenient merger policies, and leverage tariffs to counteract foreign nations' attempts to levy taxes and impose regulations on U.S. technology companies, the initial disarray during his early days in office has left major tech corporations uncertain about seeing these anticipated benefits. People within the industry and outside analysts alike are increasingly worried that perhaps this administration does not prioritize their concerns.

Following Trump’s election, leaders of tech companies in Silicon Valley have commended him through social media platforms. ended diversity initiatives and fact-checking practices He was against it and contributed millions of dollars to his inaugural funds. Onlookers believed these technology firms aimed to gain favor with the notoriously deal-making president, hoping for potential assistance from him.

So far, Trump continues to move forward. antitrust lawsuits seeking to curb or dismantle Meta, Google, Amazon, and Apple. He aims to do so. pursuing a deal To ensure that the Chinese social media rival TikTok remains accessible in the United States. Now, he has initiated a new effort. global trade war That is already affecting technology companies, their shareholders, and the individual wealth of the executives who sought his approval.

Following Donald Trump's announcement of new tariffs, Apple’s share price declined by 16% over the subsequent two days, with Meta experiencing a drop of 14%, and Amazon seeing a decrease of 13%. As per data provided by Bloomberg's Billionaire Index, Tesla chief executive Elon Musk has seen his wealth diminish by approximately $110 billion thus far this year; meanwhile, Amazon’s founder Jeff Bezos experienced a loss of about $37.6 billion, and Facebook parent company Meta’s leader Mark Zuckerberg saw losses amounting to around $18.6 billion. It should be noted that Jeff Bezos owns The Washington Post.

Venture capitalists and startup founders largely welcomed Trump’s victory in November. They anticipated a fresh era of prosperity for America as the president eliminated red tape, boosted military expenditure on drones and artificial intelligence, and accelerated technological advancement.

Adam Kovacevich, who serves as the CEO of the Chamber of Progress—a center-left technology trade organization—stated that the sector's optimism stemmed from the anticipation that Trump might view U.S. tech companies not just as corporations to be controlled but as valuable assets for advancing national interests.

" numerous individuals within the sector believed that the Biden administration declared an adversarial stance towards them," he stated. Although industry executives harbored doubts about Trump as well, according to Kovacevich, they thought he might be more accessible to them compared to Biden.

Trump has delivered for the industry on a few counts already. He rolled back Biden’s executive order on artificial intelligence, which many AI companies viewed as overly focused on safety and guardrails at the expense of innovation. And he has criticized the European Union’s efforts to regulate Big Tech via the Digital Services Act and Digital Markets Act.

In a February memorandum Trump introduced tariffs as a strategy to counteract foreign governments that have "applied their influence beyond their borders on American businesses, especially within the tech industry, thereby impeding these firms' progress and siphoning off earnings that ought to boost our nation's welfare instead of enriching them."

Several of Trump’s backers within the technology sector proposed that the President’s strategy for adjusting global trade imbalances would ultimately encourage increased high-tech investments in the U.S., arguing that the backlash against his tariffs is exaggerated. "What was once referred to as 'Trump Derangement Syndrome' has now shifted towards what could be called 'Tariff Derangement Syndrome,'" remarked Keith Rabois, a well-known venture capitalist with ties to the Republican party, on X.

However, Trump’s selections to head the Federal Trade Commission and the Justice Department’s antitrust division have indicated their intention to mostly continue the stringent stance against regulating Big Tech adopted during the Biden administration, though with slightly greater flexibility regarding mergers and acquisitions. On the other hand, his immigration policies present difficulties for technology companies eager to attract international talent.

Now these tariffs are causing uncertainty, which experts within the industry believe is hindering businesses from strategizing their future steps effectively. This market turmoil also reduces the likelihood of technology startups going public, potentially leaving venture capitalists unable to profit from their investments.

Tariff pain

In the technology sector, the reaction has been "quite universally negative towards the tariffs and how they have been implemented," according to Ryan Petersen, CEO of Flexport, a technological platform aiding businesses with their supply chain management.

"It most definitely does not align with the libertarian principles that certain individuals advocate for," he stated.

Even though "the dust hasn’t yet settled" regarding Trump’s tariffs, it's evident that they will cause significant disruption," stated Sean Murphy, who serves as the executive vice president of policy at ITI, an industry trade organization. These tariffs are expected to increase expenses for device manufacturers like Apple due to disruptions in their supply chains. Additionally, they will affect sectors such as energy and infrastructure, impacting major players in software and artificial intelligence technologies.

"Data centers, for instance, are constructed using steel," Murphy stated.

Kovacevich stated that if businesses believed the tariffs would be permanent, they might adjust their strategies by relocating manufacturing across different nations. However, since these tariffs keep changing, formulating plans for the future becomes an unwise endeavor.

For instance, numerous American technology firms had shifted the manufacturing of hardware out of China into countries such as Vietnam and India, because of tariffs on China set during Trump’s first administration. But the new round of Trump tariffs hit those countries hard, meaning imports of iPhones and gaming consoles will become more costly. On Friday, Nintendo announced it would delay taking preorders for its new game console as it studied the tariffs’ impact.

Even though the tariffs excluded computer chips, this provided minimal reassurance to the technology sector. The data center GPUs typically utilized for artificial intelligence were not part of the exemption list, as stated by an announcement from the White House. Additionally, on Thursday, Trump mentioned that a fresh round of tariffs targeted explicitly at semiconductors was in preparation.

The tariffs will raise costs on the costly premium semiconductor chips that are crucial for developing and operating AI algorithms found in products such as ChatGPT. This might impede America’s drive to outcompete China in a critical technology race.

Secretary of Commerce Howard Lutnick stated that artificial intelligence was central to President Trump’s strategy for reshaping the U.S. economy as it aimed at reducing the expenses associated with domestic production of goods. "It took waiting for the surge in AI technology to arrive so we could effectively contend with the inexpensive workforce available globally," Lutnick explained during an interview on Fox News Thursday.

Retaliation

Additionally, there's doubt about the reaction from America's trading allies—and it's anticipated that several of these countries might single out technology companies.

Silicon Valley placed significant hope in the Trump administration to utilize trade policies aimed at preventing Europe and other regions from imposing taxes and stringent regulations on American technology firms, according to Doreen Edelman, who chairs the areas of global trade and national security at Lowenstein Sandler LLP. This concept has been frequently supported by both Trump and Vice President JD Vance.

However, even though these expectations have not completely faded away, Edelman noted, they have been considerably diminished due to the extensive range of tariffs announced this week. This decline is particularly notable because President Trump provided conflicting indications suggesting that he may view tariffs as an ultimate objective instead of merely a tool for eliminating trade obstacles.

She mentioned that for U.S. trading partners, the tariffs have prompted "innovative strategies" to resist these measures. Such innovative approaches are precisely what technology corporations, which depend significantly on international market accessibility, wish to avoid.

EU officials are considering implementing tariffs on digital services purchased by European consumers from American technology firms as a countermeasure against the tariffs imposed by President Trump. This information comes via The Washington Post. reported Tuesday Each year, European consumers spend billions of dollars on digital services provided by American technology firms, including everything from Google cloud storage to Netflix video streamingsubscriptions.

Some officials from nations like France are advocating for a forceful reaction that might target Big Tech in particular, The Post reported .

Musk’s X might face potential fines amounting to up to $1 billion from the European Union, as reported by The New York Times on Thursday. This punitive action carries political symbolism considering Musk’s strong connections to former President Trump.

In other places, Trump’s tariffs have already resulted in counteractions against American technology firms.

Shortly after Trump's initial set of tariffs against China came into force in early February, the Chinese government responded. announced an antitrust investigation into search giant Google.

One hopeful sign for tech leaders came when India earlier this year removed a 6 percent tax on digital ad sales, which was instituted in 2016 and known colloquially as the “Google tax.”

However, this did not deter Trump from implementing a blanket 26 percent tariff on imports from India on Wednesday, which was among the most severe actions taken by the president.

Regulations at home

Not only were foreign regulators targeting Big Tech during Trump’s administration, but others joined as well.

The Justice Department under Trump has continued pushing forward with initiatives aimed at break up Google Following a ruling that declared it had an unlawful monopoly over internet searches, the Biden administration suggested forcing Google to separate its Chrome browser. This proposal was also supported by Trump’s legal team, who emphasized this point in their recent submission.

"It seems we’re nearing the moment when we’ll find out whether aligning with Trump will yield any benefits," stated Katie Harbath, a previous policy director at Meta who dealt with electoral matters at the company.

On Wednesday, Zuckerberg visited the White House with the intention of persuading Trump to dismiss the FTC’s antitrust lawsuit, sources close to the situation revealed, requesting confidentiality due to the sensitivity of private talks. A representative from Meta, Andy Stone, stated in an official comment, "We frequently engage with government officials to address matters related to competition, national security, and economic progress."

Trump’s Republican Federal Trade Commission Chairman, Andrew Ferguson, informed a technology news website, The Verge, on Wednesday that he would find it surprising if Trump requested him to dismiss a significant antitrust case. However, he added that he would consider doing so if necessary. obey lawful orders .”

So far, the technology executives who supported Trump have largely done so. kept their complaints private , not wanting to become targets of his anger. "Every sector is hesitant to criticize the president," stated the anonymous industry lobbyist.

The technology sector's positive outlook towards Trump hasn't vanished, according to Murphy from ITI, but "there are growing worries about what lies ahead."

"There are still positive aspects of the Trump agenda," Murphy stated. "We remain quite hopeful regarding this administration’s strategy, particularly towards AI, which emphasizes opportunities" rather than Biden's cautious stance. Additionally, he mentioned Trump’s executive order creating a “ investment accelerator to assume control of Biden’s CHIPS initiative.

However, Murphy stated that the sector is keen on seeing the tariffs "eliminated at the earliest opportunity" via discussions, allowing the administration to concentrate on "a proactive trade strategy that truly leverages America’s advantages"—like the nation’s $300 billion surplus in digital commerce from the previous year.

"We want to move past this chapter," Murphy stated.