Depending on your political leanings, Wednesday was either a dark day or the beginning of an exciting new chapter.
Trump’s proposed policies, personality, turn of phrase (the list goes on) caused a severe divide in the US and beyond, but what will the ramifications of his rise to power be over here and, specifically, on the UK’s tech industry?
Back in April, president Barack Obama warned the UK would be at the “back of the queue” in regards to trade deals with the US if the country chose to leave the EU. Trump, however, was openly in support of the leave movement and even welcomed Mr Brexit himself, Nigel Farage, to the stage at one of his pre-election rallies in Mississippi. Trump labelled Farage a source of inspiration, highlighting similarities between the Brexit campaign and his own.
“On June 23, the people of Britain voted to declare their independence – which is what we’re also looking to do, folks – from their international government,” he said.
In his first phone call with Theresa May since his election, Trump said the special relationship between the UK and the US will go from “strength to strength”, according to a Downing Street spokesman.
It’s questionable just how special that relationship is, though, given Trump spoke to nine other leaders before picking up the phone to May. But anyway, the spokesperson said the UK PM used the call to highlight “her wish to strengthen bilateral trade and investment with the US as we leave the EU”.
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Liz Ward, principal at law firm Virtuoso Legal, isn’t convinced a positive trade deal will be struck: “I have real concerns that the US will harden its position on international trade and it will become more difficult for overseas businesses to take their goods and services to the US market.”
She claimed the US already makes it difficult for the importation of some goods, especially software and some cutting-edge technologies like certain pharmaceutical products. Ward added:
“A more protectionist president won’t seek to reduce barriers, he will seek to increase them. This will set back technological advances by years and harm much of the intangible capital the UK has to offer.”
Indeed, Trump made it clear while campaigning that he intends to impose tariffs on goods from many countries, namely China, Mexico and Japan. Many feel that, while he didn’t name the UK in his list of target countries, such a policy doesn’t spell good news for our nation.
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Shaheen Schleifer, of UK web development and social media content design agency theDigital, feels Trump’s stated approach to foreign goods “exacerbates the uncertainty already caused by Brexit”.
“The portals that sell our apps and games are/will be consoles and the iOS and Android stores. These are low and mid-cost products with narrow margins and are subject to complicated VAT arrangements which will have to be untangled from the the EU. We are still waiting to see how that will affect us but it appears that these goods will face tariffs if they are to be sold in Trump’s USA,” she explained.
Schleifer went on to say she has no idea what the legal basis for these tariffs will be, nor how they will be calculated and it’s not clear what, if any, relief would be available from the UK government should Trump follow through on his pledge.
“It seems unlikely that the UK government could provide enough relief to cushion UK businesses from both the effects of Brexit and Trump,” she added.
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Schleifer said, when it comes to new physical tech products, the approach to investment and risk-taking is conservative in the UK, with partners and early adopters more commonly being located in the US. Therefore, tariffs prohibiting access to this market could be extremely damaging to UK tech companies.
Conversely, she noted, being priced out of the US market might forge promising new and rising markets elsewhere. “Although, it is hard to see where that would be,” she conceded.
Another concern is that UK startups will struggle to secure investment from those in a Trump-led America.
“The London tech scene is a relatively weak ecosystem, one that has had a lot of support at the entry level due to all of the generous tax credits that makes it relatively easy for startups to get their first £150,000. But the big problem has been getting funding after that, the first £1m or so, enough to get to some revenue where VCs might step in,” said Shelley Taylor, founder and CEO of app creation platform Trellyz.
She said Trump’s election has led to a lot of uncertainty, which investors hate, potentially creating a much more volatile market as everyone tries to figure out his policies and plans.
The combination of Brexit and Trump’s plans for killing trade deals will make the UK an even smaller island that is no longer the gateway to Europe, so it could result in fewer investors being willing to take the risk on UK startups, she argued.
Steph Fiala, COO of Flubit.com, an online marketplace for discounted products, disagrees: “I believe that with Donald Trump being appointed as president of the USA, the UK tech scene has every opportunity to thrive.”
She said the UK “is in a great position to pull investment from the US” as France and Germany are currently a “bit risky” due to upcoming elections and the US has potentially taken a step backwards in terms of promoting diversity in tech.
Fiala seems confident the UK will strike a deal to remain part of the digital single market, giving the nation easy access to the entire EU, and so will be able to attract investors from around the world.
While VCs may now be more cautious in where they place their money, Trump has been clear about one area on which he’s going to stop spending taxpayers cash: green tech.
While Obama said his efforts to establish the US as the global leader in climate policy are his proudest legacy, Trump seems determined to undo this as soon as possible.
He’s said before he believes human-caused climate change to be a “hoax” and vowed to dismantle the Environmental Protection Agency “in almost every form”.
The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.
— Donald J. Trump (@realDonaldTrump) 6 November 2012
“I suspect a Trump administration will undermine real progress in green technology generally. Trump has already dismissed global warming and there will be no encouragement of reducing carbon emissions under his administration. This is an area where the UK has leading scientific advancement to offer,” said Ward.
Trump has a reputation of being misogynistic and generally intolerant of diversity. He vowed to ban all Muslims from entering the US (although a statement on this has now mysteriously disappeared from his website) and has used a colourful array of derogatory language to refer to women.
It’s not necessary to spell out what’s wrong with this, but if his views are contagious, we could face a real problem.
Tech is an industry famously dominated by white men, but great steps have been made to address this and encourage more diversity in the sector. If intolerance of diversity is seen as acceptable, the movement to increase the balance of genders, races and religions in tech could move backwards rather than forward.
Hillary Clinton said that, in failing to win the election, she had “not shattered that highest and hardest glass ceiling”, but hopefully Trump’s succession won’t discourage women from striving for equality.
“We have still have not shattered that highest and hardest glass ceiling. But some day, someone will.” —Hillary
— Hillary Clinton (@HillaryClinton) November 9, 2016
Caroline Sherrington, of Ignition Law, said she hopes people will be galvanised in the opposite direction – striving for unity rather than division.
“Perhaps the current need for positive change that is anti-establishment (rather than establishment) could mean that now more than ever there is an opportunity for innovators and disruptors to try and use technology to help unite people and put an end to some of the divisions in society that are cropping up throughout the world,” she concluded.
What are your thoughts on Trump winning the election? Do you think it will have an impact on the UK tech industry? Let us know in the comments below.