Deregulation and innovation will shape the new Trump administration’s tech policy to bolster the US tech industry’s competition with China
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This article is part of the series, "Reignited agendas: Trump’s return and its global repercussions"
Donald Trump’s triumphant return to the White House is poised to significantly reshape the United States (US) technology landscape and its policies. His attitude towards the American tech industry, relationship with Silicon Valley executives, and America’s tech competition with China will be key factors driving this shift. During his first term, Trump had a tumultuous relationship with the US tech industry. He accused social media platforms of bias in their censorship of his messages, launching antitrust investigations against Big Tech. However, this time around, things are looking different with the president-elect’s constant emphasis on deregulation and his unprecedented association with billionaire Elon Musk, the owner of ‘X’ (formerly Twitter). The second Trump administration may thus portend a favourable environment for tech companies and social media platforms.
Things are looking different with the president-elect’s constant emphasis on deregulation and his unprecedented association with billionaire Elon Musk, the owner of ‘X’ (formerly Twitter).
Trump’s aggressive stance vis-à-vis China, emphasising national security and a disconnection from Beijing, will also play a role in shaping US tech policies. Largely, they will align with his “Make America Great Again’” rhetoric. The US crackdown on Chinese telecom companies began in 2019, during the first Trump administration, when American telecom companies were barred from using Chinese equipment. Such a hawkish approach is only expected to persist and intensify. Together, these dynamics will potentially not just restructure the American tech ecosystem, but also disrupt the global tech landscape.
During his presidential campaign, Trump often spoke about government overreach, particularly with regards to federal agencies and their regulations. Upon re-election, he promised the “most aggressive regulatory reduction” in American history. In doing so, Trump intends to starkly distinguish himself from his predecessor, Joe Biden, who made regulation a cornerstone of his tech and economic policies (as demonstrated by the slew of antitrust investigations against Google and Apple). Similarly, the Federal Trade Commission (FTC) under Biden repeatedly tried curbing the influence of tech firms by blocking major mergers and acquisitions, much to the chagrin of Big Tech.
The Biden administration also introduced more accountability and oversight measures for artificial intelligence (AI). Particularly, the October 2023 Executive Order (EO) on AI mandated safety test requirements for large AI system developers to protect users from algorithmic bias and other harm caused by commercial AI systems. The Republicans criticised these measures as stifling innovation and pushing radical left wing ideas. Many in the tech community viewed these measures as focusing too much on the perils of AI rather than its promises.
Trump is set to usher in significant changes to these issues. To begin with, his administration is likely to heed fellow Republicans’ concerns and rescind Biden’s EO on AI. There is concern that this unbridled approach may also remove guardrails against AI’s harms. Still, Trump’s actions may receive wide support from the tech industry as it races to compete with China.
Trump intends to starkly distinguish himself from his predecessor, Joe Biden, who made regulation a cornerstone of his tech and economic policies (as demonstrated by the slew of antitrust investigations against Google and Apple).
AI regulations are not the only thing the president-elect is after, as he pushes for deregulation on a broader scale, and a cut wasteful in government expenditure. The formation of the new Department of Government Efficiency (DOGE), led by Musk and Vivek Ramaswamy, is a step towards this, though its exact mandate remains unclear.
We might see a similar approach in other spheres of tech policy as well, including antitrust measures. While Trump may have begun some of the antitrust investigations against Big Tech in his first term (carried forward and intensified under the Biden administration), he may have to calibrate this approach in his second term—distancing himself from the Biden administration’s zealousness, while simultaneously still ensuring protection from the risk of Big Tech’s monopolisation and corporate consolidation (as reflected in Vice president-elect JD Vance’s stance). Reportedly, Makan Delrahim, who led the Department of Justice’s antitrust division during the first Trump administration, has been angling to run the FTC. His chequered past— blocking some mega-mergers while allowing others—potentially signals a differentiated but softer approach towards the tech industry.
Similar considerations will be at play when dealing with social media platforms and the tech executives of Silicon Valley—a relationship that has evolved and transformed in recent years. During his first term, several tech executives criticised Trump’s immigration policies. Likewise, Trump saw them as biased towards the Democrats, alleging censorship of Republican ideas and conservative voices. In 2024, his complaints persist. Earlier this year, he described Facebook as an “enemy of the people,” and said a ban on the Chinese social media app TikTok (which he had initiated in 2020, citing national security concerns) would only empower Facebook.
With the unprecedented Musk-Trump partnership, tech executives are making a not-so-subtle effort to leave their distinct imprint on the incoming administration.
Moreover, Silicon Valley retains its democratic leanings. Nonetheless, prominent tech leaders have also reached out to Trump. With the unprecedented Musk-Trump partnership, tech executives are making a not-so-subtle effort to leave their distinct imprint on the incoming administration. Elon Musk poured approximately US$ 118 million into the Trump campaign, deploying ‘X’ as a political “megaphone”. Other tech leaders followed Musk, from Jeff Bezos (Amazon) and Sundar Pichai (Google) to Mark Zuckerberg (Meta) and Tim Cook (Apple). Knowing Trump’s penchant for transactional relationships, these tech companies have understandably shifted their position to safeguard interests. This outreach is imperative, particularly for Apple (to avoid China-related tariffs as threatened by Trump) and Google (to fend off further antitrust measures that have hurt its business).
Looking beyond the United States, Trump sees the American tech ecosystem as an important bulwark against China, which represents, to him, America’s principal adversary. China’s recent strides in emerging technologies—it leads 37 out of 44 critical technologies—and its push for the Digital Silk Road has given it unprecedented heft worldwide, carving a parallel Chinese tech empire. This has stark implications for the United States and the West.
Trump is determined to push back through penal and protectionist measures. He has already threatened 60 percent tariffs on all Chinese exports to the United States. He is also expected to pressure Chinese telecom companies by imposing additional sanctions and restrictive measures to deny them market access. The choice of Marco Rubio, a known China hawk, to lead the Department of State, aligns with this outlook.
China’s recent strides in emerging technologies—it leads 37 out of 44 critical technologies—and its push for the Digital Silk Road has given it unprecedented heft worldwide, carving a parallel Chinese tech empire.
However, his policies to boost the US tech industry’s competitiveness against China remain unclear. He is expected to increase investment in critical technology research, as he had done during his first term (AI and quantum technology). However, he has also critiqued the Biden administration’s flagship initiative, the CHIPS and Science Act, which seeks to increase the domestic supply of semiconductors and decrease dependence on foreign supplies. On a related note, he also blasted Taiwan for stealing the US’s “chip business”. This has made Trump’s course of action seem uncertain, though some expect him to refrain from repealing the act.
Given Trump’s campaign rhetoric on immigration, he is expected to tighten the US policy on H1-B visas. This will negatively affect Indian tech professionals working in or seeking to work in the United States. His rhetoric of “Make America Great Again” may imply a push towards onshoring rather than nearshoring. How that will impact India in hi-tech manufacturing remains to be seen.
Beyond this, the second Trump administration is expected to continue to favour India. In the ongoing tech competition with China, Trump appreciates India’s importance as a counterweight, and he might favour a more collaborative approach. Tech collaboration will remain a key pillar for advancing the countries’ bilateral relationship. The Bidenpera Initiative on Critical and Emerging Technologies (iCET) is expected to continue. Though it may be further streamlined, Trump’s preference for transactional relationships suggests a potential trade-off. Moreover, the Quad is also likely to deepen its tech collaboration.
To sum it up, Trump will usher in a new era of US tech policy, with deregulation as its central tenet. By prioritising innovation rather than oversight, he will aim to re-establish the US’s leadership in the tech domain.
Sameer Patil is Director, Centre for Security, Strategy and Technology at the Observer Research Foundation.
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Dr Sameer Patil is Director, Centre for Security, Strategy and Technology at the Observer Research Foundation. His work focuses on the intersection of technology and national ...
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