It’s not just the stock markets that jumped after the results of the American presidential election. Given the familiarity with Silicon Valley of Donald Trump’s running mate and now vice president-elect, JD Vance, the technology sector also views the new administration favorably. Under certain conditions.
Published at 12:48 a.m.
Updated at 6:00 a.m.
“At least JD Vance has an idea about innovation, the importance of partnerships and the role of venture capital in the global economy,” he told The Press experienced Montreal investor and partner of the iNovia Capital firm Chris Arsenault. James David Vance was a recent Yale graduate in 2013 when he decided to move to San Francisco to try to break into the still relatively emerging sector at the time of California tech.
He spent less than five years in Silicon Valley. His success as a junior associate at a venture capital firm was mixed at best. But this short stay was enough for him to build relationships with some of the most influential financiers in the valley, including the libertarian billionaire Peter Thiel. Vance is said to have a vast network of contacts in American tech. He would be part of the reasons why Elon Musk became a big supporter of Donald Trump during the election campaign.
“I do not agree with Donald Trump’s values or position on what is beneficial for society,” continues Chris Arsenault. “His protectionism and the tariffs he is proposing could really hurt Canada. »
PHOTO FRANÇOIS ROY, LA PRESSE ARCHIVES
Chris Arsenault, founding partner at iNovia Capital
But I’m hopeful that Vance’s intelligence and youth will have a positive influence on how Trump approaches business and entrepreneurship.
Chris Arsenault, founding partner at iNovia Capital
The culture of California venture capital is simple: it knows no borders. It can also devastate industries. This is why Chris Arsenault is optimistic, but also cautious: he hopes that the Canadian government will be able to negotiate free trade conditions with Trump that will protect the country’s interests.
Lessons from 2016
Ironically, perhaps Trump will remember one of the first economic missteps of his previous term enough to avoid imposing the famous all-out tariff barriers that he promised during the campaign.
“Trump, during his first term, restricted foreigners’ access to work permits. At that time, several American companies discovered that it would be easier to come and work in Canada,” recalls the vice-president of foreign investments of Montreal International, Alexandre Lagarde.
Sensing a good deal, the Canadian government seized the opportunity, accelerating the issuance of work permits for foreign graduates who came to Canada to work in cutting-edge sectors, such as health technologies or intelligence. artificial.
Organizations like Ivado, Mila Québec and others took advantage of this movement.
Alexandre Lagarde, vice-president of foreign investments of Montréal International
The mission of Montréal International is to attract foreign investment. Often, these investments come from the United States. Often, too, they take place in technology sectors like AI and medtech.
The return of American protectionism does not worry Montréal International unduly. In any case, the organization is reassuring: access to the North American market is a factor in the decision to set up in Quebec, but the local workforce, which has a very good international reputation, and the quality of life in Quebec are at least as determining factors.
That said, the famous general tariff of 10% that Trump promised to impose on all imports into the United States risks hurting several of these companies established here at the invitation of Montréal International, admits Alexandre Lagarde. “There are some that export 75 to 100% of what they produce here, since they are subsidiaries of American companies. »
But, taken in reverse, this situation could discourage the Trump administration from imposing too harsh a protectionist strategy too quickly. “The important thing will be to remind him of the extent to which our North American supply chains are integrated,” continues Mr. Lagarde. A tariff on a good made in Canada will most likely impact the price of goods in the United States. The last thing Trump will want is to cause further inflation. »
In fact, Alexandre Lagarde would not be surprised if Trump used his threat of new tariffs to renegotiate the Canada–United States–Mexico Free Trade Agreement (CUSMA), which could happen in 2026. “Everyone is watching the renewal of CUSMA,” he said. “Based on last time, Trump has the habit of imposing tariffs and then using them to negotiate his trade deals. American elected officials will need to be reminded of the extent to which our economies are connected. »
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