Many of the controversial promises President-elect Donald Trump made on the campaign trail—building the wall, jailing Hillary Clinton—were clearly designed to channel the pent-up anger of many of his supporters, and in the end, the fiery rhetoric turned out to be an effective strategy. "He tells it like it is," was a common refrain among Trump voters.
Now some of the companies that were targets of Trump's ire are no doubt wondering what the next four years will bring. One of those companies is Apple, which Trump mentioned by name in a few of his speeches. In February, he used Apple's strong stance on encryption as a chance to come out hard on the side of law enforcement, saying officials had every right to access the information stored on the iPhone of one of the suspected San Bernardino shooters.
"To think that Apple won't allow us to get into her cellphone? Who do they think they are?" Trump said on Fox News at the time.
He also threatened to turn back the clock on globalism and force Apple to bring all its manufacturing back to the United States from China.
However, we should measure our response to Trump's wilder assertions. He likely said most of those things to incite emotional reactions from his base, not to actually put Apple on warning of real changes ahead. In all likelihood, Trump was using Apple as a prop—a caricature of a rich, elite, global corporation.
Trump isn't likely going to require Apple to supply on-demand "backdoors" to iPhones to the FBI. My sources within Congress (and close to it) say the jury is very much still out on the encryption issue. Lawmakers are simply not willing to make law on the issue until they have more clarity on the security implications of encryption backdoors. In addition, most members of Congress are interested in finding some middle ground where tech companies can help law enforcement and national security agencies without compromising the data security and privacy of end users.
Nor could Trump likely succeed in forcing companies like Apple to bring manufacturing home to the U.S. That horse left the barn a long time ago, and it isn't coming back. Candidate Trump's comment about forcing Apple to bring manufacturing home was a direct emotional appeal to a fear in blue-collar America of having jobs exported. This kind of incendiary statement fired up Trump's base to the point where their enthusiasm spilled over into other demographic groups that weren't expected to support Trump at all.
A Trump administration may be able to create tax incentives for U.S. companies to keep jobs at home, or tax disincentives for companies considering exporting jobs. But forcing U.S. companies to pull back manufacturing jobs that have been overseas for years is a tall order, politically. Even with a Republican-controlled House and Senate, Trump isn't likely to try such a thing. He won an electoral college mandate, but not a popular vote mandate, and many on both sides of the aisle in Washington are still unsure of the political risks and rewards of supporting a Trump agenda.
Some of Trump's rants and threats from the campaign trail are already evaporating now that he's won the election. He wailed about the government selling out to bankers and lobbyists at the expense of regular folks. And yet his staff has already floated the idea of naming JPMorgan Chase CEO Jamie Dimon as Secretary of the Treasury (despite Dimon's desire to relax Dodd-Frank lending restrictions). And Trump has already selected several longtime lobbyists to his transition team.
Nevertheless, Trump shouldn't be taken lightly. Some of his stated policy goals are politically feasible, and potentially harmful to Apple and other tech companies.
One threat to Apple, and many Silicon Valley companies, could be Trump's plans for immigration policy. He's been talking about this so much and for so long, it may be politically dangerous for him not to take some action during the first 100 days. Silicon Valley companies are reliant upon foreign engineers and other skilled employees, many of whom are in the U.S. on H-1B work visas. Restricting those visas in some way could mean a talent shortage down the road.
Perhaps the most serious threat to Apple's fortunes are the public statements and policy decisions Trump makes around international trade while in office. Apple is depending on sales in China and India for a big chunk of its future growth. If Trump's words or actions begin putting the U.S. in a more confrontational posture toward these countries, they would almost certainly respond in kind. This could lead to a kaleidoscope of negative outcomes—from foreign countries erecting trade barriers to the weakening of the dollar.
It's going to be an interesting four years. And Apple's got some big challenges ahead of it, but the biggest aren't likely to come from the new regime in Washington.