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Silicon Valley seeks to avoid ‘cold war’ with Trump and DC

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Silicon Valley has never seen anything like it. Various corporate and grass-roots alliances now stand in direct confrontation with the federal government and specifically President Donald Trump.

Since Trump’s inauguration, several pressure groups have emerged, led by the March for Science. It has more than 300,000 followers on Twitter and is organising a series of protests based on January’s March for Women. These first groups were largely, but not solely, seeded by concerns that the Trump administration was seeking to suppress federal research, chiefly around climate change.

However, confrontation took on a more economic nature at the end of January with the issue of a Presidential Executive Order that placed a moratorium on all refugee immigration to the US and also all forms of entry for citizens from seven mainly Muslim countries (Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen).

An immediate outcry drew Google founder Sergey Brin, himself an immigrant, to join a protest against Trump’s actions at San Francisco International Airport. Soon after, the wider corporate world entered the fray.

In a nigh-on unprecedented example of co-operation among rivals, over 120 of the largest US technology companies backed a so-called amicus brief to support the ban’s overruling by a federal judge when the matter went to appeal. Signatories included Apple, Microsoft, Facebook, Google, Intel and eBay.

Further down the economic ladder, another 200 start-ups and technology investment firms, led by the National Venture Capital Association (NVCA), signed an open letter to President Trump also opposing the Order.

Some of the language in these documents is worth quoting. It is, to say the least, robust.

First, there is this key section from the amicus brief: “The Order represents a significant departure from the principles of fairness and predictability that have governed the immigration system of the United States for more than 50 years – and [it] inflicts significant harm on American business, innovation, and growth as a result.

“The Order makes it more difficult and expensive for US companies to recruit, hire and retain some of the world’s best employees. It disrupts ongoing business operations. And it threatens companies’ ability to attract talent, business and investment to the United States.”

Then, there is this section from the NVCA-led letter, which goes as far as to raise questions of right and wrong:“We are deeply troubled by the recent Executive Order banning citizens of seven countries and refugees from entering the US, as well as the recently leaked draft Executive Order suggesting plans to roll back worker visa and parole programs. We believe these actions are both morally and economically misguided and will inflict irreversible harm on the startup community and America’s ability to compete globally.”

It is hugely significant that these actions drew so many backers. As a CEO for one of the signatories to the amicus brief told E&T: “Trump recognises and respects strength; the hope here is that he will see our case has strength in numbers.”

Yet there is still the issue of how far the tech community can afford to go in making that case. Few senior executives want to see their sector open up an unbridgeable rift with the presidency, whichever way they voted.

The general consensus is that while there are serious disagreements between San Jose and Washington DC, ideology needs to be kept out of the debate if at all possible. Companies want to make this primarily an economic dispute that can ultimately be resolved with some kind of workaround.

That, however, is proving easier to state as a goal than to achieve. Several executives noted how the controversy has affected two senior technology players who had originally agreed to serve on Trump’s economic advisory council.

First, there is the case of Elon Musk, CEO of Tesla and SpaceX. He strongly advocates making technology’s case from the inside, insisting that “advisory councils simply provide advice and attending does not mean that I agree with actions by the administration.”

Musk has since had the immigration issue placed at the top of the council’s agenda. Meanwhile, both of his companies signed the amicus brief, making clear where he and they stand regarding the Executive Order. So, for now, Musk stays on the tightrope.

Another council appointee Travis Kalanick, CEO of Uber, has already fallen, saying: “Joining the group was not meant to be an endorsement of the president or his agenda, but it has been misinterpreted to be exactly that.”

Events following the enactment of Trump’s order forced Kalanick to stand down before the council’s first meeting as Uber came under attack, most notably when its drivers continued to serve JFK airport in New York while local taxi drivers walked out in protest against the ban.

Similarly, while there is wide agreement that all the blame for the current crisis can be laid at the White House’s door, Trump and his aides still hold some of the best cards.

The Executive Order is now widely seen even within the administration as having been enacted without sufficient review by all the departments affected and with no real economic impact assessment.

However, it is more popular with the public than much of the media coverage suggests. Polling firm Rasmussen Reports found that a week after the Order’s introduction, it claimed the support of 52 per cent of likely voters, when framed as a temporary measure to be replaced within months by an ‘improved’ immigration regime.

Even the CEO who backed the amicus brief concedes: “There are large parts of this country where technology is not seen as the force for good it considers itself to be. We could find ourselves on the wrong side of the popular mood.”

Finally, there are some clear fiduciary considerations for the tech companies. President Trump has so far resisted calling out any of them specifically in his notorious Tweetstorms, but they remember how his December attacks on Lockheed Martin (over the cost of the F-35 fighter) and Boeing (over the Air Force One programme) led to sharp falls in those firms’ share prices.

Perhaps even more salient are Trump’s campaign pledges to reduce corporation taxes and make it easier for US-based multinationals to repatriate overseas profits without taking another tax hit. Here, the President holds billions of cards.

Another complicating factor is that an estimated 37 per cent of the Silicon Valley workforce was born outside the US. CEOs such as Apple’s Tim Cook and Microsoft’s Satya Nadella were quick to assure staff that they had their best interests in mind.

However, there are signs that some staff may take protests into their own hands, with attempts to organise walkouts at major companies on March 14.

Meanwhile, that very high level of immigrant employment is something else the Trump administration is thought to have in its sights.

“You hope they will learn from this snafu [before moving to visa reform],” says the amicus CEO. “But what we’re learning is that there are no guarantees with Trump.”

In other words, this battle may be set to rage for a while longer and its outcome remain uncertain. Economically, that will help neither side. But surely more important than all that are the thousands of immigrant engineers now stranded in limbo or fearing that they soon could be.

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