| President-elect Donald Trump speaks to a crowd of supporters on election night. Source: Jim Watson/Contributor/AFP via Getty Images. |
A second Trump administration will result in pivots across the board on key policy issues affecting the tech sector.
A Republican sweep of several swing states on Nov. 5 cleared the way for the return of Donald Trump to the White House and handed the GOP control of the Senate. Control of the House is still being decided.
Upon reentering office, Trump is expected to depart from the Biden administration on antitrust policy, broadband and immigration while potentially levying additional tariffs on semiconductor imports.
Commerce Department
Ahead of the election, Trump criticized the CHIPS and Science Act, saying it gave billions of dollars to rich companies. A better strategy, he said, would have been to raise tariffs high enough that companies were forced to build chips domestically.
The law, passed with bipartisan support in 2022, included more than $52 billion in total appropriations for boosting domestic chip production and research. Of the total, $39 billion was earmarked for incentives to help chipmakers to onshore, expand or update their manufacturing facilities.
In October, an S&P Global Market Intelligence Kagan analysis found that there have already been at least $32.52 billion in announced direct funding incentives from the CHIPS Act, meaning that it could be difficult for Trump to delay or rescind funding. But further tariffs in the semiconductor space seem likely during a second Trump administration.
"When I see us paying a lot of money to have people build chips, that's not the way," Trump said on "The Joe Rogan Experience" podcast. "You could have done it with a series of tariffs. In other words, you tariff it so high that they will come and build their chip companies for nothing."
The optics of reshoring some domestic semiconductor production through Intel Corp. and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) would ostensibly align with Trump's "America First" campaign rhetoric. Trump's previous secretary of commerce, Wilbur Ross, said in 2020 that Trump's policy agenda had led to "a renaissance in American manufacturing" and made the US "the most attractive place in the world to invest."
Industry observers note that TSMC's plans for a fabrication plant in Arizona started during the first Trump presidency.
"To Trump's very, very partial credit, the whole TSMC Arizona investment got off the ground under his watch," said Scott Lincicome, vice president of general economics at the Cato Institute. "Trump, of course, took total credit for it, which was a bit dubious, but that was really the opening salvo in all of this."
TSMC's first plant in Arizona produced 4% more usable chips than equivalent plants in Taiwan, according to the company's US division president, Rick Cassidy. The Arizona project will also eventually include next-generation 3-nanometer and 2-nanometer chips. TSMC has been promised $6.6 billion in federal grants as part of a $65 billion project in Phoenix featuring the production of current-generation chips.
Others, though, warn that Trump's focus on tariffs could result in a reescalation of the trade war between the US and China. Trade groups such as The Semiconductor Industry Association and Chamber of Progress have spoken against tariffs, saying they actually harm US chipmakers.
"Trump promises a focus on issues of minimal strategic importance to the US that nevertheless will lead to Beijing and Washington bickering," said Michael Schuman, nonresident senior fellow at the Atlantic Council's Global China Hub and a contributing writer at the Atlantic.
Federal Communications Commission
The likely successor to FCC Chairwoman Jessica Rosenworcel is Commissioner Brendan Carr, the FCC's most senior Republican and former FCC general counsel.
Carr laid out a series of priorities for the agency and US telecom policy in the Heritage Foundation's Project 2025 whitepaper, which includes exercising authority under the Communications Decency Act to interpret Section 230, the content liability shield that enables internet sites to host and moderate user-generated content.
He also wants to open up more spectrum, revisit the Universal Service Fund funding mechanism and increase regulatory scrutiny of foreign entities providing equipment to US broadband networks.
Carr has also previously expressed frustration with the pace of the Broadband Equity, Access and Deployment (BEAD) Program. Established in 2021, the program allocated $42.45 billion for states, territories and the District of Columbia to use for broadband deployment, mapping and adoption projects. The program's funding eligibility is determined by the FCC's maps of which areas are currently unserved or underserved by broadband providers.
"It is a program that is going off the rails," Carr told the House Subcommittee on Communications and Technology earlier this year. Though it has been years since the program was established, Carr added, "Today, not one person has been connected to the internet with those dollars — not one home."
It is unlikely that BEAD funds will be available before the end of 2024, Nokia Vice President of Broadband Policy and Funding Strategy Lori Adams said in July.
"The $42.45 billion BEAD program — under heavy GOP criticism for failing to fund a single broadband project in three years and for favoring fiber over other technologies – is likely to get a facelift, with more funding allocated to unlicensed fixed wireless, Elon Musk's Starlink and Amazon.com Inc.'s Project Kuiper, once operational," Ted Hearn wrote in his Policyband newsletter.
Musk, owner of X, formerly Twitter Inc., also leads Space Exploration Technologies Corp., parent of satellite internet provider Starlink. Musk has been a vocal Trump ally during the election season.
Federal Trade Commission
Vice President-elect JD Vance previously agreed with many of the efforts of current FTC Chair Lina Khan to rein in Big Tech and even suggested there could be a role for Khan in the second Trump administration.
However, Khan's removal would be a "huge catalyst for more deal flow in the Big Tech landscape," Wedbush Securities analyst Daniel Ives said.
In part, that is because the FTC, in conjunction with the Antitrust Division of the Department of Justice, released new merger guidelines in December 2023 that lowered the thresholds at which a merger was considered anti-competitive. This meant that a larger swath of deals would be subject to scrutiny and possibly a regulatory challenge.
A Trump administration would likely revise those new guidelines or revert them to the previous version, established in 2010.
Khan's removal could also have significant implications for Alphabet Inc.'s Google. Both the FTC and DOJ under Joe Biden have been pushing for a breakup of several key aspects of Google, including a divestiture of the Chrome web browser and ending licensing agreements that make it the default search engine on Apple Inc. devices.
Trump, though, has signaled support for behavioral rather than structural remedies, which would make required divestitures less likely.
Still, Trump and Vance talked about the need to rein in Big Tech, meaning the slowdown in tech M&A seen during the Biden administration could persist in a Trump administration. The prospect of a second Trump term has already generated skepticism and cautious optimism from Wall Street and Silicon Valley.
"Nobody can say with certainty what the regulatory environment next week will look like, or in January, when the players fall into place, so it just introduces more uncertainty into an already uncertain process," said Brenon Daly, research analyst at S&P Global Market Intelligence. "And so the natural byproduct of that is hesitance or reluctance, or at least caution."
Department of Homeland Security
The H-1B visa program was a major focus during the first Trump administration, with US Citizenship and Immigration Services (USCIS) denying a larger percentage of petitions in the first years of the administration. H-1B is a temporary visa category that enables employers to bring highly educated foreign professionals to work in the US in "specialty occupations" — often in the tech space.
Many of those denials were ultimately overturned, and by the end of the Trump administration, the denial rate had fallen precipitously. The current annual statutory cap is 65,000 visas, with 20,000 additional visas for foreign professionals who graduate with a master's degree or doctorate from a US institution — a cap that was set by Congress in 1990.
The approval rate for H-1B visas with requests for evidence — a formal request for additional information to process an application — in 2023 was 81%, down from 85.5% in 2022. The rejection rate for H-1B visas in 2023 was 3.5%, up from 2.2% the previous year.
Notably, Musk, who was born in South Africa and obtained Canadian citizenship through his mother, worked in the US with an H-1B visa early in his career.
It is possible that Trump, alongside a Republican-controlled Congress, could choose to change the current cap, but a more probable outcome would be to move the H-1B selection away from a lottery system to a merit point-based system. On Jan. 7, 2021, one day after the US Capitol Building attack, USCIS announced a rule intended to modify the H-1B cap selection process to prioritize higher-wage workers.
"The H-1B temporary visa program has been exploited and abused by employers primarily seeking to fill entry-level positions and reduce overall business costs," said then-USCIS Deputy Director for Policy Joseph Edlow.
The rule change was ultimately withdrawn by the Biden administration.