Jump to:
The Shifting Landscape for the Technology Sector Under the Incoming Trump Administration
As the Trump administration prepares to take the reins, tech companies should monitor new potential business opportunities and threats. On the one hand, this new administration's promise of deregulation and tax cuts, a macroeconomic backdrop of relatively lower interest rates and positive sentiment on US GDP growth set the stage for a bullish outlook on tech dealmaking in 2025.
On the flip side, policies on tariffs, trade and immigration along with continued antitrust scrutiny could create headwinds for businesses and deals in this sector.
Regarding immigration, we anticipate a significant increase in enforcement, worksite raids and investigations into US employers’ use of foreign workers. We also expect a revival of “tit for tat” trade and immigration policies resulting from tariffs such as that seen between China and the United States during the first Trump administration.
Overall, the landscape for tech multinationals is about to shift again, and preparation is key. Read ahead for three key trends for tech companies under the incoming Trump administration.
Dealmaking and Antitrust
We expect significant tech M&A activity during President-elect Trump’s second term due to strong corporate earnings, the robust outlook for US GDP, Trump's pro-business policies and proposed tax cuts and an end to election uncertainty. We anticipate that the abovementioned factors will release the pent-up M&A demand from tech companies and investors, some of whom in recent years have delayed or abandoned acquisition plans due to interest rates, market volatility, geopolitical concerns and an uncertain regulatory environment.
President-elect Trump has nominated Gail Slater to head the Department of Justice's (DOJ) antitrust division, selected Andrew Ferguson to be chair of the Federal Trade Commission (FTC) and nominated Mark Meador to fill the third Republican Commissioner slot, replacing outgoing chair Lina Khan. When these new appointees take their respective offices, we anticipate a return to more traditional regulatory review standards, potentially easing the path for some transactions.
However, these announcements also indicate that antitrust scrutiny for Big Tech and large deals in the sector will likely continue. In his Truth Social post on Gail Slater’s nomination, Trump highlighted acting against Big Tech in his first term and stated that work would continue under the DOJ’s new leadership.
We anticipate that macroeconomic factors will drive growth in cross-border deals in 2025. Dealmakers, particularly those in advanced tech sectors like AI and semiconductors, will need to navigate an increasingly complex landscape of competition and foreign investment laws as global polarization and rising protectionism escalate.
— Leif King, M&A Partner, Palo Alto
We expect merger enforcement to return to the pre-Biden framework – with the authorities potentially more willing to accept remedies to resolve perceived competitive harms. However, in recent years we’ve also seen bipartisan consensus for antitrust enforcement against Big Tech, so we expect antitrust enforcement (including of mergers) to remain robust.
— Brian Burke, Antitrust and Competition Partner, Washington DC
Trade and Tariffs
During Trump’s election campaign, he proposed tariffs ranging from 10% to 20% on all US imports and a 60% tariff on imports from China. He also suggested imposing 100% tariffs on countries that cease using the US dollar. More recently, Trump has threatened 25% tariffs on imports from Mexico and Canada unless those countries address immigration and fentanyl concerns, and has suggested tariffs on goods exported from Chinese-owned ports, including several key ports in South America.
While it remains uncertain what tariffs will ultimately be imposed, it seems clear that there will be significant tariff increases for imports having a China nexus, and there will be increased uncertainty regarding US trading relations more broadly, despite long-established trade agreements in the Americas. The Trump II Administration will be able to use authorities delegated by Congress to impose tariffs (e.g., Sections 232 and 301), but those authorities require process that take time. If Trump seeks to use emergency powers to impose tariffs immediately, there will likely be litigation, the outcome of which is uncertain. It seems unlikely that Congress, with Republican majorities for at least the next two years, will serve as a brake on Trump II Administration trade actions.
Trump’s proposals on trade and tariffs are expected to boost inflation. We anticipate dealmaking headwinds from inflationary impacts on valuations and financing costs in the tech sector.
Higher tariffs on imports could outweigh the benefit of tax cuts for tech companies with global supply chains. This may lead companies to reassess their supply chains, potentially reducing overseas positions and taking other measures to navigate the impact of Trump’s trade policies. Additionally, restrictive trade measures might result in retaliatory tariffs, increasing the costs and barriers to entry into other markets.
Beyond tariffs, we expect the incoming Trump administration and Congress to continue to focus on imposing export restrictions focused on China, in particular, in the semiconductor, AI, emerging technology, connected vehicles and biotech sectors.
President-elect Trump’s trade and tariff policies are expected to be quick and impactful. Tech companies will need to learn from past lessons to be more proactive and nimble in reassessing supply chains, identifying and diligencing alternative sourcing options and navigating the complex global landscape.
— Alison Stafford Powell, International Trade and Compliance Partner, Palo Alto
Employment and Immigration
Tech companies can also expect material changes to labor and immigration laws under the incoming Trump administration.
President-elect Trump’s announced Cabinet member selections confirm that immigration enforcement will be a priority from day one. We expect to see a significant rise in worksite inspections and I-9 audits from the incoming administration.
Tech companies should take action now to ensure they are compliant with immigration regulations and are prepared for enforcement activity or employment complaints regarding the employment of foreign workers. There is a short window of opportunity before the change in administration to consider and pursue alternative solutions and mitigation steps. Read our Trump back in office - What employers should expect regarding immigration legal alert for further information.
Another key area to watch for tech companies is whether Trump will seek to introduce restrictions on the H-1B visa program (which enables US companies to hire foreign workers for specialty occupations), as he sought to do in his first term. While immigration was a central focus of Trump’s campaign, the platform took aim at asylum law and unlawful immigration rather than legal immigration and employer-based immigration. However, Trump’s nominations for his new administration suggest significant further implications for US immigration policy, including H-1B.
Restrictions would particularly impact tech companies with labor intensive operations/large workforces and exacerbate the war for talent for companies in the sector, adding to the cost impacts of Trump’s policies for businesses.
The administration’s trade and tariff policies might also significantly affect global employee mobility by increasing relocation costs and complicating cross-border assignments. Supply chain disruptions may also necessitate reassessment of resource deployment, prompting the movement of employees across borders.
For more on what employers can expect under the incoming Trump administration, read our Looking Ahead: Spotlight on Employment article.
For tech companies, potential impending changes necessitate strategic planning to mitigate financial risks and ensure continuous talent flow across border in order to maintain both operational efficiency and global competitiveness.
— Betsy Morgan, Employment & Compensation Partner, Chicago