Trump Wins. What's Next for Tech and The Economy? — With Dan Primack and Ana Swanson

24:51But long term, could you end up in a situation where like the U.S. and China really sort of go at it from a trade perspective that it leads to some risk of China intervening in Taiwan? And then you see the problems. So you've been reporting on this pretty deeply. What's your what's your read on the semiconductor situation now that we know that Trump is going to be in office? I would say first, like just the idea of like doubling those tariffs. You mentioned Biden doubling the tariffs. I don't think that that actually really does much of anything because it's just on semiconductors that are imported directly into the United States, not on chips that are imported into the United States as part of other things.

25:28And the U.S. basically doesn't import that many single chips. Those chips go into supply chains in Asia that are made into other things. So that tariff, I think, was kind of more for show. So people do talk about the idea of putting some kind of like component tariff on chips, where if you import an electronic with a Chinese chip in it, you could still hit that with the tariff. But we're not doing that right now. But on that bigger question of Taiwan, I mean, it's a really interesting one. So Trump has made some remarks, you know, earlier this summer and then again recently, really calling into question U.S.

26:09support for Taiwan, saying that, you know, they should pay their own way. But I think it's also when it when it comes to China, like he's just really very erratic. I mean, the other quote that I really liked is that, you know, he said something about Xi Jinping, the Chinese leader, would not challenge him because he knows I'm effing crazy. So I think that tells you. That's a good chunk of Trump foreign policy. Yes, I think that tells you like, you know, a lot of what you need to know about Trump foreign policy. I mean, so I covered the U.S.-China trade war during the first Trump administration.

26:45It was just this really like bewildering mix of people with different policy perspectives. You know, President Trump, like sometimes being very tough on China, but also like extremely transactional, willing to kind of trade things in order to make business gains. you know, watching out for Wall Street buddies. So there's just a lot of things kind of going into the mix when it comes to China. I do think like both he and Washington in general are more hawkish on China than they were eight years ago. You know, so you could see, you know, I really think that there's sort of an open question of will we see some kind of like, you know, know, conflagration or with with China in the next four years.

27:32I mean, I think that that is a really big risk, you know, a trade war where China could put tariffs on American products or cut off certain critical supply chains where we depend on China for. So there's just a lot of like X factors and uncertainty there for me. And that's one of the things I think I'm going to be most focused on. Dan, I've been huffing the paint fumes of the market this morning. meta is the one company that's down and among the tech giants anything you can read into that i will go back to my old one uh prior opinion no uh it's too early no i mean like look trump has antipathy toward big tech like we know that particularly when i said i mean you know silicon valley big tech uh meta google etc um but no it's freaking early who knows okay i want to talk about the fact that uh drome powell is likely going to be replaced at the federal reserve you know con likely isn't going to be the commissioner of the FTC anymore, and whether these policies will increase inflation, and of course, how Elon might be feeling today.

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29:41You're used to hearing my voice on the world bringing you interviews from around the globe. And you hear me reporting environment and climate news. I'm Carolyn Beeler. And I'm Marco Werman. We're now with you hosting The World Together. More global journalism with a fresh new sound. Listen to The World on your local public radio station and wherever you find your podcasts.

30:08And we're back here on Big Technology Podcast with Anna Swanson. She's a reporter covering trade and international economics for The New York Times. and Dan Permac, the business editor at Axios. Okay, so Dan, first of all, with Lena Kahn, she's probably not going to be the commissioner anymore. What do you think that means for this large moment of big tech antitrust? Well, let's start with the probably part. One thing that's interesting about this is that J.D. Vance is a fan of Lena Kahn. He is, always has been. And so I assume she won't be renominated as FTC chair, Although you don't even have to re-nominate her.

30:46She just kind of gets to sit there until someone gets nominated. So she'll be there for a bit. Right. Unless she quits. So but if she's not, if it's not Lena Kahn. Yeah. I mean, look, Trump is a Trump is a fan of big business, by which I mean, like big conglomerates. He Trump has always been a bigger is better sort of person. And there's been some exceptions. Right. He tried to block the AT &T Time Warner merger. But generally, he did not stand in the way too often of major mergers while he was in office. I would assume he probably would not do that again, with again, with some particular exceptions, like the AT &T Time Warner thing was really him being pissed off at CNN, it seems is really why he tried to stop that one potentially.

31:25And you mentioned Meta being down before the break. It's possible he would have problems if Google or Meta or one of those companies tried to do something that got significantly bigger. But the reality is, the FTC and Biden's DOJ have been very tough on mergers, not just in tech, kind of across the board. It's been true in healthcare. It's been true in transportation. It's been true in a lot of things. A lot more of these deals are going to get to go through, which could be a real bailout for a lot of venture capitalists, particularly in Silicon Valley, who have been unable, who've been unwilling to put their companies in the public market really out of cowardice and have been unable to sell them to big tech because big tech has slowed down its buying appetite because it hasn't wanted to get caught up in regulatory troubles.

32:09Dan, you and I have also been talking about the fact that the administration has said that Trump has said nothing about AI. So where do you think they go on AI? I mean, I think that's the trillion dollar question, right? If you believe, and I do, and I think a lot of people do, that AI is kind of the driving tech and maybe economic force during the next several years, i.e. during Trump's term in office, he hasn't said much about it in terms of any sort of, whether that be regulation, whether that's in terms of kind of energy. I mean, you saw Amazon get knocked down the other day by the FERC in terms of wanting to put some nuclear power?

32:44Does Trump overrule that? He hasn't said much about this incredibly important topic. It did not get raised during the one debate that Harris and Trump had. It didn't get raised during the Biden-Trump debate either. And so I think that's this huge outstanding question, what he feels about this, if he cares about this. I mean, we talked about this as kind of a working class revolution election. Generally speaking, both the working class and white collar workers are both scared about AI in terms of job replacement, but he's been silent on it. So I think it's unclear who's going to get to determine that policy.

33:18Maybe that is Elon, which is also interesting since kind of America's leading privately held AI company is one that Elon is endlessly in litigation with. Right. And he has an AI company of his own, XAI, and he's spending a lot of money there. So So it's one of those things where like AI, if it can continue on its path unencumbered, or it can get hit with massive regulation that could basically stop the progress in its tracks and every possibility in between. And this also goes back to the antitrust thing to a certain extent. One thing Lena Khan has done over the past couple of months is she's been looking at these big partnership deals that companies like OpenAI and Anthropic have been signing with companies like Microsoft and Amazon to determine, Even though they've been investments and arguably kind of investments in kind rather usually than cash, it's been compute power.

34:05You know, are there potential antitrust or anti-competitive issues with those agreements? We'll see who runs the FTC and if they pick that ball up. You know, what's interesting about our economy right now is that it's kind of rip roaring. And it's even though a lot of people are feeling the impact of inflation, like the inflation has gotten down to the point where the market is in really good shape. The Federal Reserve has begun lowering rates. And one of the things that I wonder if we do end up seeing some tariffs is like, is inflation just going to come right back? And I'm curious if that's something that you think is a possibility.

34:41Yeah, no, I do think that, you know, Trump's agenda is that he proposed in the campaign trail seemed very inflationary. You know, and tariffs were kind of one component of that. I mean, I think the other key thing to bring up with the Fed and inflation is that he's also, you know, repeatedly questioned the independence of the central bank and said that, you know, he should have a greater say in setting rates. And so, you know, does that undermine the Fed's ability also to raise rates and keep inflation down going forward? You know, it's not clear whether he actually has the legal authority to do that or, you know, what's going to happen to Powell.

35:25But Trump does have an economic advisor, Scott Bessent, who has proposed, you know, a way to effectively kind of appoint a shadow chair to the Fed that could kind of undercut Powell's authority. So, you know, I think not only the economic policies that he's proposing are inflationary, but you have to think about what he would do at the Federal Reserve as well and whether that could have an impact on inflation. Dan, what do you think about the state of the Federal Reserve? Are they going to have to raise rates again if tariffs get put into place? Who might replace Jay Powell? What's your thought on that?

36:01Yeah, I mean, I think what Anna said is the big question here is how much of a direct say does Trump try to have, which would be a break with every president of our lifetimes, right, in terms of monetary policy. They don't have a say. They have a say in terms of who they nominate to chair the Fed. But after that, they're supposed to stay away and historically have stayed away. If Trump wants to have a greater say, the reason why it really matters is the Fed is supposed to be politically independent for the sake of not making its decisions for short-term political gain, whether that be raising rates, dropping rates.

36:35And, you know, it's always supposed to be balancing inflation and labor and job market. If Trump, for whatever reason, does start to have some sort of say and decides that, you know, he wants to put in these tariffs and they're inflationary, thus he has to offset that, not with something in Congress or not with another policy, but he has to offset that by changing rates at the Fed. It opens up this massive can of worms. And I don't think any of us really know where that would end and also how that would impact jobs. Because I said that the inflation labor balance is the Fed's job. And if Trump decides he needs to play with one of those, it could be at the expense of the other.

37:07It's not just the tariffs that are inflationary. I mean, I think it's also, you know, tax cuts, deficit spending, also like the immigration plans. If he goes through with actually deporting, you know, tons and tons of people who are workers, economists say that that would push wages up, you know, immediately could lead to shortages. So there are a lot of different aspects that kind of feed into that inflationary picture as well. Yeah, can I just add to that with what she said? One of the big drivers of the big inflation, kind of post-pandemic inflation, were supply chain disruptions, right? There was a lot.

37:43There was extra spending. There was a lot, but supply chain disruptions. But when we thought about those, most of them, or a lot of those, were kind of stuff coming in from overseas and literal disruptions, either because factories were closed in China or other places. There was problems with the ports, et cetera. Less of it was domestic. If you do have these massive deportations, you could have supply chain problems, which drive inflation, but they could be domestic supply chain problems. You know, stuff, factories in the U.S. just not able to operate at capacity, farms in the U.S. not able to operate at capacity, and that's your product shortages could be domestic or primarily domestic.

38:16Well, I think maybe what we need to combat all this inflation is a government agency that looks at efficiency. You might call it the Department of Government Efficiency, call it Doge, call it what you want. But it seems like on that note, that would be the department that Elon Musk would chair. On that note, Elon Musk is going to be pretty influential in this next administration. It seems like his purchase of Twitter was in some ways a success if it helped, if it helped this outcome for him. So Dan, I'm curious what you think we can sort of think about elon the morning after and was was twitter in your opinion a goodbye do you think that he's going to actually be influential in this next administration what do we think about when it comes to elon because tesla right now i mean it's just one number but it's up 12 today yeah and then look and a lot of people believe that with the trump administration spacex will be able to get even more contracts than it already currently has federal contracts than already has i mean look it was twitter a good investment uh for elon's influence yes so for call it elon inc or the elon conglomerate?

39:24Sure. If you were a lot of the folks who helped put in tens of billions of dollars to help Elon buy Twitter, including firms, you know, including a lot of venture capital firms, including Fidelity, other hedge funds. No, they're all, you know, down 70 something percent, at least on paper on this. It was a disaster for them. Because even if Tesla does very well and SpaceX does very well and Elon gets his ego stroked even more, that doesn't help you when you're what you have is stock in Twitter or X. You know, will he be influential? I mean, he will be influential. I I predicted today on X, and I'll stick to this, that there will be a massive falling out between these two before the four years is up.

39:58Because, I mean, you have to, let's just say two narcissists and two narcissists don't want to both be the main character for four years. Something has to give at some point. Ultimately, Trump has much more power than Elon Musk does because he'll be physically in the White House. But, you know, this office of government efficiency, first, it's interesting to watch Tesla be up so much today, given that in theory that should be a busy job. Right. Like I know that this is a man who apparently can be CEO of an unlimited number of companies and have an unlimited number of jobs. But at some point, something has to give.

40:29Secondly, when Elon has talked about this, he's talked about I think he talked about removing two trillion dollars annually from the U.S. budget. That is more, I believe, than there is discretionary spending in the annual U.S. budget. I think I'm right about that. So I don't believe he's going to hit the numbers he thinks he's going to hit, which like lots of things when it comes to Elon goes to how much does he actually understand what he is saying? when it's outside of his direct wheelhouse. Anna, what do you think about the doge, as they call it? Yeah, yeah. So I don't cover that many aspects of Elon Musk.

41:01I mean, some of it. But one thing that I'm kind of thinking about today is what happens with Donald Trump's policies toward China. And will Elon Musk be any kind of influence on that? Because, you know, obviously Tesla's business, Elon Musk's business is really wrapped up in China and in interests there. So I wonder if he could be kind of a moderating influence. I mean, Musk has met with senior Chinese officials on various occasions. So that's one thing that I may be watching. That is fascinating because Tesla, a lot of Tesla production happens in China. I don't think Elon Musk wants the U.S. and China to be at each other's necks, and especially not in a sort of spiraling trade war.

41:53He's in a tricky spot with Tesla with that, right? Because you say he manufactures a lot there. We believe he sells a lot there. They don't break it out. So you don't know how many cars in China versus cars in the U.S. The tricky part is what he does want is probably a continuation of this new Biden policy, which is basically stopping low-cost EVs from coming to the U.S., right? He wants that because that's good for Tesla, right? if you don't have a bunch of$20 ,000 pretty decent EVs showing up here. But on the other hand, as Anna said, he doesn't want it going reciprocally. He wants to continue being able to sell easily and manufacture easily in China.

42:24And then he also does want tariff stuff going on with Mexico because he wants Detroit, who wants to make some EVs in Mexico, have a hard time getting those cars into the United States. So he's got a kind of a chessboard, and it's clear the way he wants to do it, whether he can actually navigate all that with Trump is to be said. Yeah, I wonder if China will see that as a lever, though, because, you know, I mean, China is the source of almost all of the world's critical minerals and car batteries. I mean, there's just an incredible lock on that upstream EB supply chain from China. So that could be a really powerful lever if we get into some kind of trade war situation.

43:04I'm just looking at the Rivian stock right now. And let's see what it is. down 9.8 % today. Yeah, it looks like BYD is down as well and CATL. So the market is basically saying that Elon is going to be a big winner here. Well, he should be, right? I mean, he has, I mean, you can decide how much credit you want to give to individuals. He played a real role in this election, financially and socially, call it. He played a role. I mean, and Trump has embraced him repeatedly on the campaign trail. He's not treating him like a rich pest who you have to suffer in order to get his money. He has really embraced him so far.

43:45So he's going to play kind of a role he wants to play, it seems, at the outset. Yeah, and he shouted him out again in the victory speech early this morning. He did. But again, remember Trump in 2017 when he took office and remember all the people who were around him and how few of them were there just one year later. Well, basically almost nobody except the family. Correct. And Steve Mnuchin. He lasted. OK, so before we go, I'd love to hear both your bull case and bear case for the Trump economy over the next four years. Why don't we go Dan first and then Anna? I'm on the spot here. All right.

44:22I mean, the bull case is that Trump gets to inherit a really strong economy and there's not particular reasons to think that that that there's kind of a crash on the horizon. Right. Like, you know, he's getting something that's got a lot of tailwinds behind it and including technological tailwinds when it comes to things like AI, which the U.S. continues to lead in. And if the next great global tech slash business trend is something the U.S. is leading in, that's a really good tailwind to inherit and to be able to continue to foster. And clearly, there were some things that Biden did that were kind of, if not anti-business, definitely restricted business.

44:57On the other hand, the bear case is Trump revels in chaos. And you don't always know where that is going. You don't know necessarily what he's going to do next. He doesn't necessarily know what he's going to do next. And leave aside market uncertainty slash certainty. Decisions that get made impulsively, which Trump often seems to make, can lead to pretty disastrous results. Right. And is the spending, I mean, just one follow up to that, the spending can eventually catch up. It doesn't seem like it has yet, but it has to eventually. Or maybe I'm wrong. I don't know. I don't know if it has to catch up in four years.

45:33But look, I mean, look, there's some basic there are a lot of very basic math problems with what Trump has promised. Again, go back to what Elon said. Elon is somehow going to cut more money off the budget than exists in the budget. So like there's some there's some basic math problems that have to get solved here, even even if Trump follows through on a lot of his promises. OK, Anna, what do you think the bull case and the bear case is for the next four years? Yeah, I mean, I would say something similar. The bull case is that some of these threats that he's making in terms of what he would do to the economy really are more about showmanship and bluster.

46:10Tariff threats are just that, threats. It's something that he uses to extract some concessions from other countries, but maybe not that actually disruptive to global trade. And again, I mean, trade actually is kind of a small percentage of the overall U.S. economy. Like we're a big economy and we're kind of isolated. So compared to some other countries, we're not actually as exposed to trade. You know, bear case, I guess, immigration is a slogan and not something he can, you know, actually practically accomplish. Tax cuts, you know, go through Congress and end up being like a somewhat sensible policy process.

46:51I mean, I think the bear case, you know, for me, do we get into a big trade war? You know, I was just talking about critical minerals from China, you know, do we see really significant supply chain disruptions in various parts of the world? And then I think, honestly, you know, do we see an actual war? You know, like, I, going back to the he knows I'm effing crazy comment, You know, there are a lot of there's a lot of instability in various parts of the world. I mean, what do we see with Russia? What do we see with Taiwan? So, yeah, I don't want to, you know, be too too negative this morning and rain on everybody's week.

47:35But I think that, you know, the possibility of real like international instability is definitely something that we're going to be watching for. Can I give one more also that ties to Anna said on immigration? We've talked about undocumented workers getting deported, and Trump said he's going to do that on day one. There's also this bigger legal immigration question. Trump has tried in the past to tamp down on it. You heard some talk about that during the campaign. You know, long term for the U.S. economy, particularly when it comes to technology in Silicon Valley, that's an issue, right? And I appreciate that maybe we won't need as many workers in the future because we've got bots to do everything for us.

48:08But like, it's been surprising. It was surprising to me that when a bunch of Silicon Valley venture capitalists were talking a lot about Trump's little tech positive agenda, that immigration rarely came up. Because not only do immigrants historically found a lot of companies, people who come from overseas to Stanford, MIT, to Harvard, to these other U.S. educational institutions often stay here and become incredibly, not just productive members of society, but kind of transformational ones. Look, Elon Musk is one of them. So we'll see. Anna and Dan, definitely want to let listeners know where to find your work.

48:39So Anna, do you want to tell people where to subscribe and find your articles? Yeah, sure. So I write for The New York Times. You can Google me. It's A-N-A-S-W-A-N-S-O-N at NYT. I have all my articles up there and definitely appreciate everybody reading and supporting The Times. Great. And some great stories about NVIDIA there and sort of broader U.S. AI chips and making their way into the hands of people in China, even if we had some trade restrictions. So definitely recommend people check that out. And Dan, how can people sign up? Yeah, so I'm business editor at Axios and I write on the ProRata newsletter, which covers kind of deals and deal makers.

49:18You can get that at getprorata.axios.com. Great stuff, highly recommend it. All right, everybody, thank you for listening. Thank you, Dan and Anna for coming on the show. We'll be back on Friday with another show, mostly focused on tech. We've done a lot of politics in the middle of this week. We'll go back to the bread and butter on Friday and then we'll have some fun stuff coming up for you next week. Thanks for listening. And we'll see you next time on Big Technology Podcast.