How Trump's presidency will reshape the global tech order

Donald Trump's remarkable political comeback has been the story of the week, maybe the year and possibly the decade. A figure who has dominated the global political discourse for nearly a decade is now back in charge and in the strongest position he has ever been. It is a remarkable turnaround but one that has global ramifications, not least for Asia-Pacific. So, what does a Trump presidency look like for the region and both its media markets and players?

One thing to immediately highlight is that Trump not only won the presidency but that the Republicans also won the Senate and may also win the House. If they do win the latter, the so-called trifecta, then this will significantly increase the scope of what a Trump administration can do. The American system is designed to reduce the powers of an imperial presidency but one who controls Congress has far more power. If the trifecta happens, the effects I describe below will be amplified. 

First off would be the effect of tariffs. Trump has stated he will impose tariffs of 10% on all imported goods and up to 60% on Chinese goods. One immediate effect—which may already be coming through in results—is that the advertising tailwind from Chinese-based advertisers (such as Shein and Temu) for platforms such as Meta and Amazon will likely diminish rapidly. To some degree, the unwind is already unhappening, given the changes to the so-called de minimis tariff rules, which significantly reduced exemptions for Chinese companies importing into the States. 

However, there may be some knock-on effects which might not seem so obvious. For a start, Chinese-based advertisers locked out of the US market may decide to redouble their efforts to markets such as Europe and Latin America. Perhaps, more consequently, the Chinese authorities may decide the key way to counteract the tariffs is to boost domestic consumption significantly to reduce the reliance on exports. That will likely mean far more economic stimulus to persuade consumers to spend and overcome their traditional focus on savings. If that happens, it may end up boosting advertisers' sales and advertising growth in China. My feeling is, though, this would take time to come through. 

What about potential retaliation by the Chinese authorities against Western companies? That is certainly a threat, maybe more for American ones. However, such responses must be weighed against the above policy of boosting consumer demand. The two most obvious companies with major interests in China are Tesla and Apple. I suspect Tesla will ultimately be fine because a move against Elon Musk—who is now tied in closely with the Trump Administration - would be seen as a provocation too far. However, Apple is certainly a company that could be on the receiving end of such moves. 

What about the rest of the region? A key thing to look out for is the likely strength of the dollar. Commodity costs are priced in dollars, so an appreciation of the dollar means goods cost more in lower currency. The dollar strength was one of the factors driving inflation in non-US regions in 2022. So, advertisers needing to deal with increased inflation is another potential issue. However, unlike 2022, there is not (hopefully) the outbreak of another major war to fuel the inflationary flames. If everything, if Trump can end the Russia-Ukraine war, then that should help reduce commodity prices in more food-related areas. 

Two other areas to highlight. The first is that Chinese tech companies, like their retail counterparts, may move even more aggressively into non-US markets to maintain growth (I am looking at you TikTok) for fear their offerings may be curtailed in the United States. 

The second is more fundamental. Actions taken in the United States will have global ramifications. If the new Administration decides to go after Big Tech - which a large section of the Republican party, together with the incoming vice president JD Vance, would like him to do - then measures such as a break-up of Google and /or the curtailment of the likes of Meta and Amazon will also impact the Asia-Pacific tech ecosystem. Similarly, if the Administration goes after the major US broadcast networks, this will have implications for what they can do in the region. Look out for those.

As usual, this is not investment advice,  

Ian Whittaker is the founder and managing director of Liberty Sky Advisors. He writes regularly for Campaign about the advertising landscape from a financial standpoint.