

The return of Donald Trump to the White House signals potentially significant changes that could affect small and medium-sized enterprises (SMEs) worldwide that rely on Cloud infrastructure.
On Trump's first full day in office, this white paper explores the likely direct and indirect impact of the incoming administration's policies on Cloud-dependent businesses outside the United States, to give some strategic insights for decision-makers.
Potential Impact
Tariffs and Cost Implications
The most immediate and substantial impact stems from Trump's proposed tariff regime. The administration plans to implement broad tariffs, including a baseline 10% on all imports and up to 60% on Chinese goods. These tariffs will affect the cost structure of Cloud services in several ways:
Hardware Costs
Data centre equipment and components face significant price increases, with laptop costs potentially rising by 45% and server components seeing similar increases. Cloud providers will likely pass these increased infrastructure costs to customers through higher service fees.
Operating Expenses
Major Cloud providers may need to adjust their pricing models to account for increased operational costs. The impact could be particularly acute for services requiring substantial hardware infrastructure, such as AI and machine learning capabilities.
President Trump has already taken steps to implement these tariffs. On his first day in office, he signed an executive order directing the U.S. Trade Representative to begin the process of imposing tariffs on a wide range of imports. This move has already caused uncertainty in global markets and raised concerns among U.S. trading partners.
Regulatory Environment
The Trump administration's approach to technology regulation presents a mixed picture for Cloud-dependent businesses:
Cloud Service Provider Regulations
The Trump administration may revisit the "know your customer" rules for infrastructure-as-a-service providers introduced in the previous Trump presidency. These rules require CSPs to verify the identities of foreign entities using their platforms and take action against malicious use. While aimed at enhancing security, these regulations could create additional compliance burdens for non-US SMEs accessing US-based Cloud services.
Cybersecurity Framework
A "strategic pause" in CISA cyber incident reporting rules is expected. The administration may reject aspects of Biden-era strategies that imposed greater regulation on the private sector. There could be increased emphasis on voluntary standards rather than mandatory regulations
AI Regulation
The administration has already taken action on AI regulation. On his first day in office, President Trump signed an executive order rescinding President Biden's AI Executive Order from October 2023. This move signals a significant shift towards a more hands-off approach to AI regulation. The focus will likely shift from AI bias and discrimination concerns towards ensuring US competitive advantage over China. State-level AI regulation may increase, creating a complex compliance landscape.
Data Sovereignty and International Relations
Several factors could affect international data flows and Cloud service delivery:
Cross-Border Data Flows
Project 2025 suggests resetting data governance negotiations with the EU. Increased geopolitical tensions may lead to stricter data localisation requirements. SMEs may need to reassess their data storage and processing locations.
International Competition
The administration's focus on competition with China could affect global Cloud infrastructure:
Stricter export controls on AI-related technologies. Potential restrictions on cross-border Cloud service delivery.
Increased scrutiny of international technology partnerships. The Trump administration is expected to take a more aggressive stance on technology competition with China.
This could include stricter export controls on advanced AI chips and technologies, which may impact global supply chains and the availability of certain Cloud services.
Infrastructure and Energy Policy
The administration's approach to infrastructure and energy could affect Cloud service delivery:
Power Infrastructure
Plans to "slash red tape" for energy generation projects. Potential loosening of nuclear regulations, which could benefit data centres. Focus on addressing the surge in electricity demand from data centres.
Data Centre Development
Streamlined permitting processes for infrastructure projects. Potential changes to environmental regulations affecting data centre operations. Emphasis on domestic infrastructure development.
President Trump has already announced plans for significant investment in AI infrastructure. He is set to announce a private sector investment of up to $500 billion in AI infrastructure, involving companies like OpenAI, SoftBank, and Oracle. This massive investment could reshape the landscape for Cloud and AI services in the coming years.
Strategic Implications for SMEs
Cloud-dependent SMEs outside the US should consider several strategic responses:
Risk Mitigation
Diversify Cloud provider relationships across multiple regions. Review and potentially revise data storage and processing locations. Assess the impact of potential cost increases on business models
Technical Architecture
Consider hybrid Cloud approaches to reduce dependency on US-based infrastructure. Evaluate local alternatives for critical services. Plan for potential service disruptions or cost increases.
Compliance Planning
Prepare for a more complex regulatory environment. Monitor federal and state-level regulations that might affect Cloud service delivery. Review data governance frameworks in light of potential policy changes.
Recommendations
SMEs dependent on Cloud infrastructure should:
Conduct Cost Analysis
Model the impact of potential price increases. Identify areas where costs can be optimised. Consider alternative service providers or architectures
Review Technical Architecture
Assess current Cloud dependencies. Identify critical services that might need alternative arrangements. Develop contingency plans for service disruptions.
Monitor Policy Developments
Track changes in US technology policy. Assess the impact of state-level regulations. Stay informed about international data governance changes.
Explore New Opportunities
Investigate potential benefits from increased AI infrastructure investment. Consider how to leverage new technologies and services that may emerge from the changing landscape. Stay agile and ready to adapt to rapidly evolving market conditions.
Summary
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The Trump administration's approach to technology and Cloud computing presents both opportunities and challenges for non-US SMEs relying on Cloud infrastructure. While the focus on innovation and deregulation could lead to advancements in Cloud services, potential changes in data privacy, cybersecurity, and trade policies may create new compliance burdens and operational challenges.
Non-US SMEs should closely monitor policy developments in the United States and be prepared to adapt their Cloud strategies accordingly. This may involve reassessing data management practices, diversifying Cloud service providers, and staying informed about evolving compliance requirements.
The rapid pace of change in the early days of the Trump administration underscores the need for businesses to remain vigilant and adaptable. From executive orders rescinding previous regulations to announcements of massive investments in AI infrastructure, the landscape for Cloud-dependent SMEs is shifting quickly. It will be crucial for businesses to stay informed and agile in their response to these changes.
By remaining agile and proactive, SMEs can navigate the changing landscape of Cloud computing under the new Trump administration and potentially leverage new opportunities for growth and innovation.