Editorial Note: Opinions and thoughts are the author’s own and not those of AFROTECH™.
Donald Trump will soon start his second term as president of the United States and will have to show the people who voted for him that he will follow through on promises made on the campaign trail. He promised to raise tariffs on exports from countries like China to prioritize American workers and companies here in the United States. Given how impactful tariffs can be on certain countries and within certain areas of the tech industry, it is best to prepare ahead of time for how those tariffs will change the industry and affect opportunities. Tariffs are an additional tax added on a country’s imports or exports. Trump’s relationship with tariffs started during his first administration, and they were primarily targeted at China. The first exports he put tariffs on were solar panels and washing machines at a rate of 20%-50% in January 2018, which affected China and other countries. He subsequently put a 25% tariff on steel and a 10% levy on aluminum from most countries in March 2018. So while some believe that his threat of tariffs on other countries is new, it’s been part of his negotiation tactics for a while now. The effects of these actions by Trump caused nations to take retaliatory steps towards the U.S. via their own set of tariffs on American exports, which increased the prices of goods like washing machines by approximately 12% in the U.S. The tariffs did not only lead to higher costs but job loss as well. A 2019 paper by Federal Reserve Board economists found that the tariffs on steels and aluminum led to a loss of an estimated 75,000 manufacturing jobs. Given the previous impact of tariffs on the cost of items as well as job creation, I do not imagine we will see a better outcome with this round of tariffs. In this piece, I will touch on who in tech would be affected by the “America First” tariff policies that Trump’s previous presidency and campaigns have been centered around and how that impacts the tech industry at large.
The budding relationship between the tech industry and the public sector started back in April 2020 at the beginning of the COVID-19 pandemic when Marc Andreessen, the co-founder of storied venture capital firm Andreessen Horowitz, penned a blog post titled “Its Time To Build.” In this, he touched on his frustrations with America’s attitude towards sectors like health care, housing, education, manufacturing, and transportation — all areas that governments at the local, state, and federal level interface with on a regular basis. This is when Silicon Valley, which used to stay away from sectors that interact too much with the public sector, started to warm up to the idea of “building.” Three years after his post, the firm formally launched their $500 million American Dynamism Venture Fund with the ambition to invest in companies that were tied to America’s interests such as manufacturing, housing, defense, and energy. All areas that the right type of tariff on the right country could help, providing an advantage to startup firms that share Andreessen Horowitz’s dream of American dynamism. Many would benefit from such tariffs in a big way. For example, Trump is looking to increase tariffs on Chinese automobiles such as ones created by the Chinese automotive company BYD. This would directly benefit electric vehicle manufacturers such as Tesla, founded by one of Trump’s biggest supporters Elon Musk, as well as the American legacy auto manufacturers such as Ford. Tariffs do not only impact foreign countries that want to export to the United States but also American citizens who manufacture overseas. At this year’s Consumer Electronics Show, or CES for short, founders of companies presenting their products expressed concerns to NBC News about how these tariffs may cause them to pass the increased price of building onto consumers buying their products.
While Trump’s tariffs could change the cost of goods for consumers, I believe that it is also going to impact the culture of the early-stage startup ecosystem online. On X, you can see that since Trump won, many on the platform have become pro America. You can see more and more tech professionals with an American flag in their bio to signal that they are people who are down to build tech to build America. Patriotism in itself is fine, but this America-first culture has started to also encourage people to feel like they have license to say whatever they want, as long as they phrase it as being something that is for the betterment of America. We have already seen it create conflict on X with the conversation around H-1B visas. I’m a believer that people use economic actions to push a specific ideology or culture forward, and we are seeing that with Trump and his tariffs.
The policies that Trump is putting forth is signaling that the time of being open to others is coming to a close and that we are moving towards a more insular world. This lack of openness will negatively affect Black people because even in the most liberal of environments Black people were still getting the short end of the stick. I do believe that Trump will follow through with his threat of tariffs, which will make items such as automobiles and electronics like phones and computers more expensive. Knowing what may go up in price over time can help any Millennial make financial decisions in the present to benefit them in the long run.
