(Bloomberg Opinion) — Despite the various frictions, America’s technology sector did pretty well during Joe Biden’s presidency — and despite the various warnings about his mercurial opponent, many tech executives supported Donald Trump in his 2024 campaign. After his victory, even more rushed to Trump’s side, with Meta founder and CEO Mark Zuckerberg going on Joe Rogan’s podcast to talk about his admiration for the president-elect and the need for more “masculine energy” in US corporate culture.
Then came the Liberation Day tariffs, and then Obliteration Day in markets, and finally the Equivocation Day partial tariff rollback. Meanwhile Meta shares are trading below their price on the day of Zuckerberg’s appearance on Rogan. It turns out that whatever the merits of masculine energy, a global trade war is not good for the tech industry.
The whole episode ought to be an opportunity for a mutual reconsideration from both Democrats and the technology world: How did they come to be so alienated from each other, and isn’t it past time for a rapprochement?
It’s not just that tech benefits, probably more than any other sector, from the globally integrated cooperative economy that Trump disdains. It’s that the underlying motives for Trump’s trade policies are rooted in nostalgia economics, which is antithetical to any vision of progress.
For starters, even though Trump’s “reciprocal” tariff strategy has now been withdrawn, it’s notable that his formula simply ignored the existence of services exports. From Hollywood to Silicon Valley to Wall Street, many of America’s most successful companies are service exporters. It should be concerning to everyone — especially executives and investors in the service sector — that the US has a president who believes that these industries somehow don’t count.
Consider that amid the tariff chaos, Trump took the time last week to sign some executive orders that he claims will promote a revival of the coal industry. He rightly pointed out that Democrat-supported initiatives to help retrain miners did not resonate in coal country, where voters preferred his pitch that he would keep the mines open. “You could give ‘em a penthouse on Fifth Avenue and a different kind of job and they’d be unhappy,” Trump said, surrounded by miners. “They want to mine coal. That’s what they love to do.”
As an observation about voter psychology, it may well be true — and it may even have implications for trade policy. Communities that have lost factories to China or Mexico don’t want to hear that openness to trade makes Americans better off on average. And they don’t want sophisticated plans for retraining or economic revival. They just want their jobs back.
But as the basis for economic policy, it’s a dead end. An approach designed to stop anything from ever changing is irreconcilable with economic growth — and toxic to the spirit of innovation and disruption that is at the core of Silicon Valley.
Trump is of course not entirely consistent in his application of these anti-progress views. When it comes to classes of people that he disdains — government workers, academics, researchers — he is happy to see them lose their jobs. But if it’s people he has cultural affection for, he is eager to stand athwart history shouting “no” — supporting dockworkers in their opposition to port automation, for example.
A 2017 paper from Stanford Business School found that technology entrepreneurs had broadly liberal views on cultural issues, favored globalization, were open to redistributive taxation, and were extremely hostile to regulation. This worldview is in many ways the opposite of Trump’s sentiment-driven, nostalgia-soaked outlook. It broadly favors a competitive economy open to technological change and foreign competition, but with progressive taxation that finances a generous social safety net. That generally tracks the approach to economic policy taken by Bill Clinton and Barack Obama, and — along with Silicon Valley’s location in Democratic California — it helped create the tech sector’s alignment with the party.
During the Biden years, with several notable exceptions, much of the tech world seems to have forgotten exactly how crazy and backward-looking Trump is. Biden, meanwhile, won a Democratic Party primary by promising wealthy donors that he would make them pay higher taxes but would not “demonize” the rich and that “nothing would fundamentally change” for them. Leftists weren’t happy, but it was a perfectly reasonable pitch.
Once in office, however, Biden appointed regulators who weren’t just interested in tax progressivity but wanted to rein in the power of large US businesses. This did not amount to very much in practice, but many tech entrepreneurs and investors found it threatening, insulting or both. Paired with the backlash to the excesses of left-wing cultural politics and Biden’s personal lack of interest in technology, the stage was set for a rightward turn.
But Trump himself has not changed his spots. He remains hostile to scientific research as well as trade. He’s made it harder to hire skilled immigrants while turning America into a markedly less desirable place for foreigners to study.
Business leaders did eventually denounce Trump’s tariffs, which may have played a role in his announcement of a 90-day suspension. But their initial reluctance to vocally criticize a decision that was catastrophic for their own share prices reveals a deeper concern. Could it be that they fear that Trump’s liberal critics are right — that he is a dangerous leader with minimal respect for the rule of law? When Joe Biden was president, and if Kamala Harris were now, it’s safe to say that no one in Silicon Valley felt or would feel the need to restrain themselves from criticizing any decisions they saw as bad for their company.
Democrats should try to make nice with their former friends. More talk about shared prosperity, and less about “oligarchs,” will help them assemble the biggest possible coalition against Trump. But the tech world itself also needs to think harder about where its real interests lie. Trump may have stepped back from the brink this time, but he has made it abundantly clear that he would like nothing more than to destroy the very system of international trade that has helped make Silicon Valley so prosperous. The time to try to stop him is before he consolidates enough power to actually achieve his goal.
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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Matthew Yglesias is a columnist for Bloomberg Opinion. A co-founder of and former columnist for Vox, he writes the Slow Boring blog and newsletter. He is author of “One Billion Americans.”
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