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Mossberg: The Trump effect

Big changes could be in store for tech, but details are scarce

Amazon's chief Jeff Bezos, Larry Page of Alphabet, Facebook COO Sheryl Sandberg, Vice President elect Mike Pence, President-elect Donald Trump, Peter Thiel, co-founder and former CEO of PayPal, Tim Cook of Apple and Safra Catz of Oracle attend a meeting a TIMOTHY A. CLARY/AFP/Getty Images

A couple of weeks ago, President-elect Donald Trump summoned the leaders of top tech companies to his New York skyscraper for a meeting. He showered them with praise. “There’s nobody like you in the world,” he said in the public portion of the session, adding, “we’re going to be there for you.”

But, during his long campaign, he wasn’t always so friendly or supportive of the tech industry, many of whose executives privately or publicly opposed him. He threatened specific tech companies; called for huge tariffs on China, where many tech products and components are made; strongly sided with the FBI on forcing the decryption of smartphones; and has appointed people to his transition team who have opposed net neutrality. He also suggested “closing up” parts of the internet so ISIS can’t use it. More recently, he has seemed to play down the threat of cyberwarfare, declared that no computer can be made safe, and that the best way to securely communicate is by courier.

In general, while Trump has been a master of Twitter, he has shown an aversion to, and ignorance of, technology itself. And he has made comments that put him at odds with at least some of the views and practices of the major tech companies.

It’s difficult to know how many of these statements and positions, many of them unscripted and off-the-cuff, will be translated into policy, or make it into law, even with a Republican Congress. But it’s clear that both tech executives and tech consumers will need to be focused on Washington to an unusual degree in 2017, regardless of their politics or their views on particular issues.

So, as we start the new year, here’s a rundown of stuff the president-elect has said about tech, at least in public.

Computers have complicated our lives

Just last week, Trump told reporters: "I think the computers have complicated lives very greatly. The whole, you know, age of computer has made it where nobody knows exactly what's going on. We have speed and we have a lot of other things, but I'm not sure you have the kind of security you need.”

He has also said: "I'll tell you what: no computer is safe.” On more than one occasion, he has boasted that his 10-year-old son is a wizard with computers, implying that they are easy to manipulate by the young, and therefore untrustworthy. But millions of seniors are far more comfortable with technology than Trump seems to be.

He certainly has a point about security. No computer or smartphone can ever be considered 100 percent “safe.” We’re all engaged in a perpetual battle with criminals and hostile governments trying to use computers and the internet to steal information and identities. But Trump often seems simply suspicious or hostile to technology and his overall tone about computers is sure to rattle an industry based on its benefits.

Nobody expects the president to be a nerdy tech enthusiast, but it’s jarring to hear the next leader of the US dismiss the invention that underpins America’s most dynamic industry, one where America leads the world.

Trade with China, US manufacturing

A central theme of Trump’s campaign, of course, was his repeated pledge to return manufacturing jobs to the US from low-wage countries — especially China. He even talked about imposing a huge 45 percent tariff on imports from China in some circumstances. While this could have vast inflationary consequences throughout the economy, it would be especially hard on the tech industry. Practically every smartphone, tablet, and laptop is fabricated in a Chinese factory, even if they are designed here.

Trump told The New York Times he had talked to Apple CEO Tim Cook about building its products in the US. “I said, ‘Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.’”

It would be theoretically possible to move the manufacturing, or at least final assembly, of such tech products back to the US. But it would be difficult. An entire supply chain, readily available in China, would have to be replicated.

Also, to offset the much higher wages here, any new computer factory would likely be heavily automated, vastly reducing the jobs Trump might hope would be created. As The New York Times recently reported, Apple’s US plants were highly automated as far back as the 1980’s, before the company moved most of its production to China. A new factory would likely have even more robots.

Still, the industry could be pressured to open a few US plants, possibly as a condition of a low-rate “tax holiday” that would allow it to repatriate foreign cash holdings at low rates.

Threats against tech companies

Back in February, Trump called on people to “Boycott Apple” when it said it couldn’t unlock iPhones to help law enforcement agencies search them, because doing so would breach encryption.

In May, Trump said Amazon had a “huge antitrust problem” and that Amazon CEO Jeff Bezos was using The Washington Post, which Bezos — not Amazon — owns, to try and defeat him to avoid that problem. He also accused Amazon of avoiding huge amounts of taxes.

Both Bezos and Cook have since met with Trump. They had little choice. As Cook later explained: “Personally, I’ve never found being on the sideline a successful place to be. The way that you influence these issues is to be in the arena. So whether it’s in this country, or the European Union, or in China or South America, we engage. And we engage when we agree and we engage when we disagree.”

But the president-elect hasn’t retracted those threats.

Neither company is perfect, of course, but both are shining exemplars of American capitalism, among the most innovative and important companies of the last 50 years. It’s extraordinary that they were singled out as targets by the next president.

Privacy and encryption

Which brings us to why Trump threatened to boycott Apple. He was publicly furious that the company, which prides itself on encrypting its iPhones in a way that even it can’t defeat, refused to create a modified operating system for the FBI that would do so. Apple argued that complying with a court order obtained by the Bureau would create code that could potentially fall into malicious hands, threatening privacy and security. It also noted that other countries, including repressive regimes, would demand access to the code.

To be sure, the Obama administration also quietly backed the FBI, but it never called for a boycott, and the FBI backed down after saying it had found another way to get into the phone. Next time, under a Trump presidency, Apple and other tech companies may find themselves in a much tougher position.

Net neutrality

This one is much tougher to nail down, because Trump himself has said little about net neutrality. But he has appointed transition advisers who oppose it, and many telecom and tech experts expect his FCC to abolish or weaken it. That could allow deep-pocketed companies to buy faster or better service for their content at the expense of upstart, poorer competitors. It might also clear away any potential federal bar to “zero-rating,” the practice by which cellular carriers make it possible for customers to stream carrier-owned video and audio without counting against the users’ data caps.

Trump did oppose the proposed AT&T-Time Warner merger — a possible source of more zero-rating — during the campaign. But there have been some reports suggesting that the companies needn’t worry.

“Closing up” the internet

Last year, while addressing the issue of ISIS recruiting terrorists online, Trump said: "We're losing a lot of people because of the internet.” His solution: “We have to see Bill Gates and a lot of different people that really understand what's happening. We have to talk to them about, maybe in certain areas, closing that internet up in some ways. Somebody will say, 'Oh freedom of speech, freedom of speech.' These are foolish people."

This remark was mainly treated in tech circles as a joke, another sign of Trump’s lack of knowledge of how the internet works. And I’m certain Bill Gates would lack the time or inclination to try and “close up” the internet.

But I’m not sure it’s so funny. After all, other countries have made it very hard to reach certain websites and online services, or have imposed various other kinds of internet censorship. In the name of fighting terrorism, who knows what a hard-line administration might try? Or where it would end?

Bottom Line

I don‘t know for sure where President-elect Trump will come down on these and other issues important to the future of technology and the internet. I suspect the tech CEOs don’t either. But one thing is clear: the status quo between Silicon Valley and Washington is likely to change under a president who has shown himself to be alarmingly suspicious of, and uninformed about, the digital world.