It is highly unlikely any country facing US tariffs will want to curb the ability of their citizens and businesses to buy software and IT services from US firms. Yet the current tariffs affecting manufacturing is set to disrupt IT hardware. What about software?
Big Tech appears to be aligning with the Trump administration and this effect seems to be spreading to other sectors. It has been widely reported that a number of leading legal firms in the US are quietly falling in line with Donald Trump, after the president reportedly threatened to exclude them from any government work.
There are numerous combinations of what-if scenarios that could be played out. Imagine if under the guise of “make America great again” the US administration decreed that US made software should be significantly discounted for US citizens and businesses compared to the cost those in other countries would have to pay.
Hypothetically, there are a number of ways this could be achieved. Putting aside whether it is legal or ethical, imagine a Trump-esque art of the deal having on the table an offer to slash corporation tax for Big Tech in exchange for lower software fees.
Or perhaps there will be an incentive involving relaxation of the H1-B visa scheme for speciality vocations like software engineering, which US tech firms rely heavily on to ensure they can hire the most sought after talent in the tech sector, wherever these people are located.
Nothing is certain, which is why there is panic in the financial markets. One of the panels held at the Kubecon + CNCF (Cloud Native Computing Foundation) in London earlier this month, highlighted the risks of organisations taking pre-emptive actions to avoid falling foul of US legislators.
“There are geopolitical realities for an organisation like the Linux Foundation because it operates primarily inside the United States,” Randy Bias, vice-president of open source strategy and technology at Mirantis warned, referring to the Linux Foundation’s decision in November 2024 to exclude a cohort of Russian Linux kernel maintainers.`
Policymakers and business leaders need to be cognisant of all possible scenarios that may play out in the coming weeks, no matter how brazen or subtle they appear.
There is already some regional disparity in software licensing costs and IT services charges. No one expects the EU’s Ursula von der Leyen or Keir Starmer here in the UK to decide that we need to charge a tariff on US tech imports, covering software, hardware and IT services. But the current rhetoric from the White House appears to be pointing to policy-making that is not merely about putting America first, but achieving this at the expense of every other nation that trades with the US.