Just more presidential venting at Big Tech? Not exactly. Donald Trump took swipes at both Apple and Google over their work in China, and not just rhetorically. Google, a favorite target for populists on both sides of the political aisle, has long been criticized for their work in enabling oppression of speech in China, but Trump amplified a recent allegation that Google presents a national-security threat beyond that. Is it true? Trump leaves that question open, but says he’ll get an answer shortly

https://twitter.com/realDonaldTrump/status/1154753932259991552

Trump had already agreed to look into an allegation that Google was acting in a “treasonous” manner, a charge made by Silicon Valley and political heavyweight Peter Thiel. Last week at the National Conservatism Conference, Thiel posed three questions to get asked about the Internet giant:

“Number one, how many foreign intelligence agencies have infiltrated your Manhattan Project for AI?

“Number two, does Google’s senior management consider itself to have been thoroughly infiltrated by Chinese intelligence?

“Number three, is it because they consider themselves to be so thoroughly infiltrated that they have engaged in the seemingly treasonous decision to work with the Chinese military and not with the US military… because they are making the sort of bad, short-term rationalistic [decision] that if the technology doesn’t go out the front door, it gets stolen out the backdoor anyway?”

He also added that those questions “need to be asked by the FBI, by the CIA, and I’m not sure quite how to put this, I would like them to be asked in a not excessively gentle manner.”

At that time, Trump tweeted out that “the Trump administration will take a look.” Since then, the Department of Justice announced that it would open a review of anti-trust enforcement and the Big Tech companies, Google included, but that didn’t involve nat-sec issues. This is a pointed reminder that Trump’s still thinking about Google in other ways, and that Thiel’s allegations are being taken seriously … at least for public consumption.

That’s worrisome for Google, but at least Trump hasn’t hit them in the wallet. Apple didn’t fare as well today, with Trump announcing that the tech giant won’t get tariff waivers for which they applied recently. If they don’t want to have tariffs applied on their goods, Trump tweeted, they can build in the US instead:

https://twitter.com/realDonaldTrump/status/1154774656861257732

The costs won’t get started immediately, the Wall Street Journal reports, because those specific tariffs have not yet come into effect. When they do, however, Apple customers will have to pay even more for the high-end-priced Mac Pros. Larry Kudlow had a suggestion for Apple:

Earlier this year, Apple shifted Mac Pro production to China—its only major device that was being assembled in the U.S.—as trade tensions escalated between the Trump administration and Beijing, The Wall Street Journal reported last month. This week, the company filed a series of requests with the Office of the U.S. Trade Representative, asking that the government exempt specific products from a proposed 25% tariff on goods imported from China.

While those tariffs haven’t yet been implemented, they would include electronics, which could severely impact Apple’s bottom line. …

Asked if Mr. Trump was denying Apple’s request for a waiver, Mr. Trump’s economic adviser Lawrence Kudlow told reporters, “He said what he said. That’s the president speaking. He is the decision-maker.”

“There’s some talk that they would be moving some of their production facilities to Texas,” Mr. Kudlow added, referring to Apple. “If they do that, that’d be a very good thing.”

All of this is good politics for Trump. Attacks on big tech play well with his populist base, as does hammering outsourcing by a major manufacturer — even if it will drive up costs in the short- and long-term. Trump’s squeezing Silicon Valley to force them into a tougher negotiating position on their political agendas as well as their practices when it comes to policing speech. It helps that neither of these tweets actually go so far as to have an immediate impact, which keeps the president from dealing with much backfire. It’s inexpensive, politically speaking.

It does raise one question, however. What happens if and when Trump reaches a trade deal with China? After all, his tariff war is not cost free, as we saw in today’s Q2 GDP report from the Bureau of Economic Analysis. At some point, Trump will want to declare victory, perhaps just in time for it to impact his general-election chances. If the China trade war ends, though, Trump loses a significant amount of his leverage over the Big Tech bêtes noires. That sets up an incentive to never quite get the agreement, although it’s possible that Trump will prioritize the economic gain over the political leverage. It just … bears watching, especially for skeptics of executive power.

Addendum: Of course, this is also an indirect attack on China. Trump decided to add another more directly:

https://twitter.com/realDonaldTrump/status/1154821023197474817

It’s not clear what the USTR can do about this situation except pressure the WTO into tougher enforcement. They’re already under pressure in the US-China dispute, since our allies want it resolved in the WTO. It sounds more like a threat to make them completely irrelevant. That would light a bigger fire under them too.

Update: As our friend Justin from Texas reminds me, it’s the Mac Pros that are at issue in these tariffs, not the Macbooks. I’ve corrected it above. While writing on … my Mac Pro. *sigh*