Donald Trump was set to make a landmark return to the Oval Office, with UK Prime Minister Keir Starmer offering his congratulations on the win.
Trump will be inaugurated on 20 January. The Republican has been heavily backed by many of Silicon Valley’s technology leaders and investors.
Stocks were up on the news, as was the dollar. Bitcoin broke a new record.
His win “marks the beginning of the most difficult economic moment” in Germany’s post-war history, said Moritz Schularick, president of the Kiel Institute for the World Economy amid fears over export tariffs.
It was the economy, stupid
Much international discourse around the campaign has focused on Trump’s felony convictions and the January 26, 2021 “insurrection”.
For most of the voting public it was more about “the economy, stupid.”
Inflation, jobs and the economy are the top concern for 63% of consumers, a Morgan Stanley research report showed in October 2024.
Trump’s messages on these resonated. Some campaign promises of his:
- Lower corporate tax from 21% to 15% for domestic manufacturers
- A 60% tariff on all imports from China
- Boost domestic oil and gas production
- Eliminate taxes on overtime
- Deport illegal immigrants
A new Trump presidency will “incorporate aggressive onshoring ambitions, lower corporate taxes, and a subdued regulatory landscape," economist José Torres at Interactive Brokers said. His election is likely to trigger renewed M&A activity as the FTC reins in activity, analysts added.
(The bipartisan Committee for a Responsible Federal Budget estimates that Trump's policy mix of tax cuts, tariff hikes and spending changes will add $7.75 trillion to the US national debt over the next decade, however.)
Here's The Stack's take on the impact of a Trump win for tech and beyond.
Tariffs
An interview with Kevin Hassett, Chair of the Council of Economic Advisers during the Trump Administration (2017-2019) published in a Goldman Sachs analysis last month, was telling on tariffs.
“Most countries charge the US a higher tariff on the goods we export to them – on average, around 6.5% – than we do on the goods they export to us—on average, around 3%. The first trade policy proposal in the Republican National Committee’s platform is a Reciprocal Tariff Act, whereby the US would impose the same tariff rates on our trading partners as they do on us. Whether the US would go up to 6.5% or our trading partners would come down to 3% is an interesting question, but India, for example, has an average bound tariff rate of around 50%...” – Kevin Hassett.
Despite this, major Indian IT outsourcer's shares rallied. The US is the $254 billion industry's biggest market. Analysis by Indian reporters suggested that local companies have "progressed in both service delivery and hiring local talent for specific roles" with reduced reliance on H1B visas.
(UK think tank the National Institute of Economic and Social Research or “NIESR” said on Wednesday that Trump’s planned tariffs would result in weaker activity, rising inflation and higher interest rates in the UK…)
Space factory aspirations
A closer look at that Republican National Committee "platform" reveals bullish support for crypto, promises to rein in restrictions on AI and the pledge to create a "a robust Manufacturing Industry in Near Earth Orbit."
Whilst this might sound like a far-flung proposal, tech's billionaires have long been "dead serious" about moving manufacturing to space.
NASA in 2020 proposed procuring 50-500 grams of lunar regolith (rock materials) from the surface of the Moon – and Jeff Bezos' Blue Origin in 2023 won funding to build an "end-to-end, scalable, autonomous, and commercial solution that produces solar cells from lunar regolith."
The three mentions of "tech" in the platform meanwhile pertain to border control, military innovation and deregulated AI activity without proving much policy detail – although the former includes the promise to "get woke Leftwing Democrats fired as soon as possible."
See also: US Space Systems Command CIO “Colonel K” on shipping good code, transforming culture
Cryptocurrency is another big winner from Trump's victory. Bitcoin broke a record $75,000 barrier on the news of a likely Trump win.
He has been supportive of cryptocurrency. Hassett said “The SEC and CFTC’s befuddling war on crypto has been one of the great financial regulatory failures in US history. The role that both agencies have assumed in determining what constitutes a security, how they can be traded… and their attempt to create the regulations through enforcement, is chilling.”
Expect a more congenial regulatory approach.
Republicans will end Democrats' unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency. We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control – The Republican National Committee
Tech M&A to bounce back?
Lower taxes and less regulation under Trump 2.0 is expected by many analysts to help restart what has been muted tech sector M&A activity.
Deal cycles tend to depend less on policy and more on broader factors including the overall state of the economy [but] still-low activity levels, strong equity markets, the opening of new markets, impending interest rate cuts and positive industry expectations also can help M&A recover, even if there are political challenges. – Morgan Stanley
Former Trump advisor Hassett agreed: “FTC’s intense scrutiny of mergers and acquisitions… basically brought these transactions to a standstill in recent years should be relaxed, and quickly. [M&A is a] vital part of an efficient economy, and so the intention should be to undertake a regular Herfindahl index type of review rather than to stop them in their tracks.”
Bad for Europe
Trump's election may not be good news for Europe.
As analysts at ING noted this morning of Trump's win: "A looming new trade war could push the eurozone economy from sluggish growth into a full-blown recession. The already struggling German economy, which heavily relies on trade with the US, would be particularly hard hit by tariffs on European automotives... Even though tariffs might not impact Europe until late 2025, the renewed uncertainty and trade war fears could drive the eurozone economy into recession at the turn of the year."
See also: VW burns €2 billion as software losses mount, group profits plunge
That means that the European Central Bank will "need to do the heavy lifting, pushing interest rates into easing territory" ING suggested, anticipating a 50bp rate cut at the ECB’s December meeting "with expectations of the deposit rate dropping to at least 1.75% by early summer, possibly followed by further easing towards the end of 2025.
The big unknown both for the technology sector and beyond is the extent to which Trump's geopolitical inclinations shape the broader macroeconomic environment. Trump has promised to end US aid to Ukraine and end the war in Ukraine through a negotiated settlement with Russia and get the conflict in the Middle East “settled”. (On the latter, he notably established the Abraham Accords.)
The biggest loser from his win meanwhile? The climate. Trump has pledged to repeal IRA subsidies for green technologies; lift hurdles to oil and gas development; and reverse restrictions on greenhouse gas emissions – moves that will no doubt encourage others to follow suit.
