US election: its impact on technology

• If Joe Biden is reelected, we expect broad policy continuity when it comes to the technology sector, including restrictions on trade with China and more regulation of artificial intelligence.

• If Donald Trump wins, we expect a more unilateral approach to China policy, with the 10% tariff proposed on imports leading to tensions with US allies.

• Mr Trump is also more likely to be more hands-off on competition and artificial intelligence, but stricter restrictions on migration could affect recruitment in the tech sector.

• The executive branch can only do so much if Congress is divided, giving both the judiciary and individual states strong roles.

EIU forecasts that Joe Biden, the Democrat incumbent, will win a second term as president on November 5th 2024. But the race will be very close, and should the former president, Donald Trump, (the likely Republican candidate) win, his policy choices will be very different to his predecessor’s. This is the case with the technology sector, where we expect Mr Trump to be even more concerned about US reliance on tech imports, particularly from China, but less focused on domestic antitrust issues. However, if (as expected) Congress remains divided between Republican and Democrat control, then passing laws will remain difficult. The president will still be able to issue executive orders over areas where funding is not needed, but that would leave both the judiciary and individual US states with strong roles in determining policy.

If Joe Biden is reelected

We expect broad policy continuity when it comes to the technology sector. This means public investment in infrastructure, whether broadband networks or semiconductor manufacturing, which are some of the areas where both Democrats and Republicans are in agreement and have passed recent legislation, such as the 2022 CHIPS and Science Act. A new Biden administration would try to enact stronger regulation, but without the backing of Congress this time; we do not expect regulation of artificial intelligence (AI) to go beyond the Executive Order stage, or that Congress will pass a full federal privacy law. 

This means the executive branch though the Federal Trade Commission (FTC), Federal Communications Commission (FCC) or Department of Justice (DoJ) would need to use current legal authority to bring cases on antitrust against the largest technology companies. The administration would also continue its policy towards China, which is to prevent the country from acquiring the most advanced technology and ensuring the US retains a large enough lead over its rival. This means bringing allies on board with the policy, using a multilateral framework to advance US interests.

If Donald Trump is elected

A Trump administration would have the same objectives over China, but would try to implement them very differently. It would be more unilateral and transactional, giving less importance in trying to bring other countries on board. His proposed 10% tariff on all imports would create further tensions with allies, and would also negatively impact US tech companies manufacturing their products abroad, such as Apple. 

It is unclear how President Trump would use the executive agencies under his control. On the one hand, traditional Republican thinking is to be light-touch on issues such as competition, which would mean less regulatory scrutiny. But on the other hand, Trump could target the companies which he feels may have slighted him, making this policy much more ad hoc than with Biden. A Trump administration would also be stricter on immigration, and may target the H-1B visa that US technology companies have widely used to bring the best and brightest talent to work for them. Technology recruitment, which is already difficult amid tight US labour markets, could become harder. 

Finally, it is unclear how a Trump presidency would deal with AI; so far the candidate has only defined the technology as dangerous and scary. But several Republican attorneys general have recently come out against the Biden administration’s October 2023 Executive Order on AI, which suggests that little should be expected from the executive branch under Mr Trump, who would take a much lighter touch approach than his predecessor. 

Legislation will be difficult for either administration

Whoever is in the White House, a divided Congress means that few, if any, specific tech laws can be passed. Even when the Democrats were in charge of both the White House and Congress between 2021 and 2023, none of the proposed tech regulations on issues such as antitrust or privacy became law. Even the recent hearings on child safety online (the latest in a series over the past few years) have not so far led to legislation. This lack of legislative action means the judicial branch, up to the Supreme Court, has become the ultimate decision-maker in any executive attempt to intervene in the tech sector. And it also means that individual states have become more proactive in passing their own laws, as California did for privacy and many others did to establish online age verification rules. 

Section 230 of the Telecommunications Act of 1996 provides a clear example of how the courts and states are looking to fill gaps left by Congress and the White House. The section says that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”. It means that tech companies are immune from liability over the content their users publish on their platforms, and also have the right to edit or remove that user content, under the companies’ First Amendment rights of free speech.

Both political parties are unhappy with the section, as they feel it gives too much power to the tech companies, but neither has so far been able to amend it, because they cannot agree on what should replace it. States have tried to take over, with Florida passing a law banning platforms from removing political candidates, and Texas passing one banning platforms from removing user content. Lower courts struck out the two laws, and the Supreme Court will decide whether they are constitutional. Precedent suggests they are not, with the court ruling recently in other cases that these are decisions for Congress to make. But this shows that – if a weak Congress limits what the executive can do – the courts and the states will look to fill the void. 

The analysis and forecasts featured in this video can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.