Executive powers can’t turn Trump into Putin

Alan Philps looks at who is opposing the new American president as he pushes his policy agenda.

American president Donald Trump. Andrew Harrer / Bloomberg

When Donald Trump surveys his enemies he is unlikely to feel troubled by the Democrats, still smarting from their loss of control of the White House and Congress in November. The United States judiciary is a more serious adversary: judges have reversed the signature policy of the Trump revolution, restricting entry from seven Muslim-majority countries, and this is likely to lead to a lengthy legal battle.

If he casts his eyes over the horizon, to the West Coast, he may see a more serious opponent – a rapidly forming corporate opposition bloc. Apple, Google and Facebook are leading the charge of some 100 tech companies against Mr Trump’s immigration policy, arguing it is discriminatory and harms businesses that rely on top talent is from abroad.

The tech companies are, however, poorly cast as patriotic heroes, given that their business is disrupting the stable American jobs that provided good wages for workers in the past. If Mr Trump has a vision of America rooted in the 1960s, it is hardly surprising that he is now locked in combat with the prime movers of 21st-century change.

The most vocal of the tech bosses is Travis Kalanick, chief executive of Uber, the ride-hailing firm which is undermining the licensed tax business around the world. Mr Kalanick is open about his firm being run by immigrants for immigrants, who can earn a living as a cabbie without knowing much English or geography.

Mr Kalanick’s top executives are Thuan Pham, a refugee who fled Communist Vietnam by boat, and Emil Michael, who arrived as a baby in the US from Egypt. Questions have been asked about Mr Kalanick’s good faith, however.

Talk of Uber’s “values” sits oddly with the complaints of some of his drivers who even though they may work full time are not formally employed and have no right to holiday or sick pay. Critics point out that Mr Kalanick was driven to speak out by commercial concerns: a damaging campaign to delete the Uber app from smartphones in protest at his membership of Mr Trump’s economic advisory council. He has resigned from the council.

As he faces down these over-mighty citizens, Mr Trump can look for guidance in an unlikely place: Vladimir Putin’s Russia.

After Mr Putin came to power in 2000, he invited 21 of Russia’s leading businessmen – the so-called oligarchs who made fortunes by clever or illicit appropriation of state assets – and told them their days of exerting political power were over. They largely fell into line, and were allowed to keep their fortunes, except for one – Mikhail Khodorkovsky, formerly Russia’s richest man, who spent 10 years in prison as an example to the others.

Mr Putin’s dominance of Russian politics and the economy can be traced to that meeting, and to the model of authoritarian capitalism he has pioneered as a result. Mr Trump will no doubt look enviously on the Kremlin chief’s success. If the tech leaders are allowed to prevail, it is hard to see how the reactionary Trump view of tight border control can prevail.

Mr Trump has already begun his assault on the West Coast progressives. The state of California, which relies on imported labour to pick fruit and staff the tech industries, is planning to declare itself a safe place for migrants, building on a tradition of American “sanctuary cities” which welcomed refugees from Latin American dictatorships. In these cities, local police are not allowed to check anyone’s immigration status, thus frustrating federal law.

Mr Trump has promised to withhold federal funding from sanctuary cities and even more so if California becomes a sanctuary state.

The tech companies themselves will be a hard nut to crack. Five of the world’s top 10 most valuable companies are in the US tech sector – Alphabet (the parent of Google), Apple, Microsoft, Facebook and Amazon. These are much more than US corporations; they are the masters of globalisation, adept at finding the world’s smartest brains and cheapest labour. The chief executives of Google and Microsoft were born in India.

So there is no doubting the depth of feeling or the financial interest in Silicon Valley for keeping the US a country of immigrants. In the case of Russia, Mr Putin’s task was much easier – Russia is a country that lives on oil and gas sales, where the state has many levers to assert control over private interests. Not so in the ultra-competitive world of high technology.

Mr Trump’s dream is to have the iPhone made in the US. He could, as he has promised, impose a 45-per-cent tariff on imports from China, the source of three-quarters of mobile phones shipped to the US. That would hit the tech companies hard, but transferring production to the US would be problematic.

Chinese manufacturers achieved a level of efficiency and attention to detail that would be hard for the US to match, until work is all done by robots. There is also a small economic matter: the cost of manufacturing of the iPhone in China (excluding parts) is tiny – between $5 and $8 – or 1 or 2 per cent of the retail price. Bringing that process back home will not make America great again.

Mr Trump faces a dilemma: as president he needs to show the tech sector who is the boss. As a businessman he would be reluctant to crash the country’s most successful companies.

The first two weeks of the Trump revolution have been a parody of the Putin style of issuing far-reaching executive orders. This may have worked for Mr Putin, a far more thoughtful character than the US president, but it does not work in the US.

In the end there is probably a way to control immigration while heeding the concerns of the tech sector, but it will require a far more sophisticated and long-sighted approach than Mr Trump has shown now.

Alan Philps is a commentator on global affairs

On Twitter @aphilps