How new US tariffs are forcing Europe to rethink its entire tech stack | Hacker News Reader

How new US tariffs are forcing Europe to rethink its entire tech stack

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I run a small IT consultancy in EU mostly for companies with factories, so I have some biases. I have a few issues with the way IT leadership in EU has been running things the past 20 or so years:

- Absolutely 0 care for having a de-risked supply chain. In fact, IT leaders are extremely happy to have fewer and fewer suppliers, I think it is even one of their goals! And look at it now, what to do when 70% of your company runs on Microsoft and this happens?

- Buy always, no matter what the process is, just buy more tools. So what could have been 1 Python script now is a 5 years contract with yet another US supplier, all data stored in proprietary formats locked under complex APIs of course

- Bundle everything, and I mean everything, in the ERP. Make the ERP so big and complicated that adding anything to it requires tens, or even hundreds, of thousands of euros and multiple months of "development" (as an aside, did you know SAP ABAP code is stored in a database???)

- Lock yourself up completely with whatever Cloud provider you decide to use. Using AWS? Let's do everything with lambdas! Because, who cares about being Cloud agnostic and de-risking your AWS investment?

- Never invest in your internal tech talent, always go after shiny new tech solutions that deliver at best 20% of what they promise, while good motivated employees could have delivered 80% at a fraction of that cost

- Never push back on business asking for specific tools just because the vendors of such tools are amazing at marketing. 90% of manufacturing companies could replace Salesforce with much simpler tools (who knows, maybe even EU based?) and save millions. But no, let's go after brands and never consider the actual 1) business process we are trying to improve; 2) the reference architecture; 3) the underlying data we want to do CRUD on

The re-thinking of the tech stack is not a US tariffs issue, it is an IT leadership problem, and a serious one. The overwhelming lack of understanding of simple risk management strategies has gotten us here, EU companies should never, ever, have put themselves in this position in the first place.

> I have a few issues with the way IT leadership in EU has been running things the past 20 or so years

I'm not disagreeing, but you are mistaken if you think this is just an EU thing. It's everywhere. I seems to be driven by two things.

One is focus on the knitting - and outsource everything else. Everything else includes your security infrastructure - which you outsource to Active Directory running on Azure, or Okta. Amazing, since both have been ripped new ones in spectacular fashion.

The second is de-risking requires redundancy. Redundancy is expensive, and worse hard. It means you have to deal with multiple suppliers and glue them together. That requires internal expertise, but you just outsourced the external expertise so you could stick to your knitting.

Why aren't they being disrupted by those who have much more efficient operations?

Because in the industries I have experience in IT has typically very little to do with the type of efficiency that matters in manufacturing. For instance, moving a factory from Germany to Romania is going to give you faster and more predictable savings than, say, optimizing production with IT and automation (obviously take this example with a grain of salt and the usual "it depends").

The theory was that Industry 4.0 should somehow change that, at least in Europe, by adding more automation and tech to production. I have seen only 1 factory built that way and, let me say, it was a complete mess IT wise. There is also the issue that the same people that were building factories in the 90s are now also building the "new" factories.

It's not the taxes, it's the loss of trust and security.

THIS

Ordinarily, trust is earned in drops and lost by the barrel.

However, in the last eleven weeks, the current administration has sunk and destroyed supertanker-loads of trust in The United States Of America, and in every field including defense, security, health, science, academics, political, economic, and anything you can think of.

Even if the goals are good, the way they are being implemented is insanely stupid and damaging to everyone involved. (And I mean stupid in Cipolla's formal definition [0] of actions that harm both others and yourself.)

Any rational non-American person will not consider the US to be a reliable trustworthy partner in any venture. They may do deals at arms-length, but never again as a trusted partner.

Even if the policies are 100% reversed, the uncertainty will linger. Will international students really trust they won't be disappeared into a Central American prison if they say the wrong thing on social media? Will businesses really make a major capital investments when random tariffs may be added or removed on any day? Will allies really trust we will be there to defend them as they have come to our aid every time? A key part of trust is certainty, and uncertainty alone is deadly to relationships.[Edit: added this paragraph for clarity]

Much of America's prosperity was based on the tacit assumption of goodwill.

That is GONE.

If it is ever rebuilt, it will take not years or decades, but generations.

[0] https://principia-scientific.com/the-5-basic-laws-of-human-s...

The goal is pretty overtly destructive

This is broadly a good thing: it will lead to more competition and a more vibrant, diverse internet with a wider array of choices. It does, of course, suck for the companies that are used to being near-monopolies.

Which is not to say that the tariffs are a good thing at all, of course. But if it encourages international communities to build their own stacks and add them to the marketplace, that's a really strong silver lining in my mind.

this is also my thinking. what trump is doing is pure evil, but he will have unintended positive consequences by undermining american monopolies.

Yep. I think package/source repositories will need to add "Political Sphere" right next to "License" in the top-level information so tech people can choose the right dependencies. Companies/projects will need to have a political policy just like they have a legal policy.

Every continent will have its own cloud, and tech by the end of 2050.

This is looking like a good bet at this point.

Even if Republicans are removed from office in the next election, the damage is done. Europe simply can't trust in the long term stability of US policy. If Europe cannot trust in it, neither will any other continent.

That’s already mostly true except for Europe. OVH, Hetzner, etc. are not hyperscale providers nor have they shown the ability to evolve in that direction over the past decade, and to be honest the conditions in Europe are just not there for any one of them to evolve into a “proper” cloud provider.

Cloud isn’t VMs, it’s managed services.

I believe politicians in the EU are chomping at the bit to get a digital services tax implemented against US big tech companies. I think Silicon Valley tech titans really screwed the pooch here.

They are going to be big targets for trade retaliation and I am not sure how much help the US government will be able to offer. Moreover, if the administration changes, the Democrats will absolutely take apart these tech companies.

Looking at the situation from the shoes of a tech titan (Zuck, Musk, Bezos, etc), i almost see it as the lesser of two evils.

The problem they had was Lina Khan, who was dead set on breaking up their monopolies. They all decided to get into bed with the Trump admin and help het the guy elected, they all say it was for free speech but let’s get real it’s only because Lina Khan is no longer at FTC.

But now they have a different problem because Trump decided that tarrifs are a great idea and now they are going to take a massive hit over the next few years as folks outside the US increasingly look for non US cloud solutions.

The tech hate is bipartisan, however the tech companies got lucky that the Republican choice for President happens to be distinctly corrupt and easy to buy off with money and flattery. Additionally, his feelings are so easily hurt that Congress, which otherwise might implement bi-partisan tech legislation, is afraid of offending him for fear of being targets of his lashing out, so they're just sitting on the sidelines rather than legislating.

This is a unique set of circumstances; given any other combination of parties in power, with any different President, and they'd be in the bullseye right now.

> so they're just sitting on the sidelines rather than legislating.

Not really!! Many are schooling him these days, but he’s too dumb to understand anything

> The problem they had was Lina Khan, who was dead set on breaking up their monopolies.

Guess what? The breakup of their monopolies is still going to continue :-)

Free speech? Did Biden put a Bridle in their mouth to control their speech?

The breakup of their monopolies is still going to continue

You believe that, if it brings you comfort.

Yes, if Europe creates alternatives to American monopolies, they won't be monopolies any more.

> You believe that, if it brings you comfort.

DOW hitting 100k+ and one of each in 'Magnificient 7' reaching 10T+ valuation, one day trip to Mars (conditionally, it has water and oxygen) - will bring me great comfort. It doesn't work that way, my friend!! Many times reality is harsher than it is not. We have to face it regardless of comfort.

The Biden administration coerced social media and technology companies into censoring user content. There was an implied threat that if the companies didn't comply then the administration would hit them in other ways. This was a violation of the spirit of the First Amendment, although not technically illegal.

https://www.scotusblog.com/2024/06/justices-side-with-biden-...

(Yes, I am aware that other administrations have also attempted various forms of censorship so let's not waste time on whataboutism.)

Trying to control misinformation about an unfolding pandemic is not the same as this: https://pen.org/banned-words-list/

Public health is primarily a responsibility, not a culture war.

Nonsense. The desire to control misinformation does not in any way justify censorship. The ends don't justify the means. And much of the content that was censored (or shadow banned or whatever) was either factually accurate, or simply opinions.

The tech titans' problems with the Biden administration went beyond Lina Khan. They were upset about foreign taxes and fines, and felt that the Biden administration hadn't done enough to promote the interests of US tech companies abroad. There may be some buyer's remorse at this point.

> if the administration changes, the Democrats will absolutely take apart these tech companies.

I don’t know if it will happen though. Tech companies have a lot of cash and lobby power. But some kind of move is highly needed as the tech sector morphed into something despicable

Even from a practical point of view. Now, however ill-advised, you're in the middle of a trade war. It's probably taking a huge toll on your economy. Are you gonna mess with what are likely the last pillars of what economic stability you have left? I think medical/healthcare will not be able to be touched for a while. Tech will not be able to be touched for a while. And so on. They just provide too many jobs in an environment where jobs in other sectors will likely be insecure at best and disappearing at worst.

Like what, mess with social media and advertisurveilance? That will damage what's left? I really don't think so..

America runs a large trade surplus in services, but unfortunately for the US quaternary sector only 1950s-style manufacturing counts in the minds of some key decisionmakers.

The administration has screwed the pooch here, all trust built between the EU and US since WWII is effectively gone forever. The trust that allowed the EU to assume that the US was largely aligned with European standards and goals and that the US could be trusted as a long term partner for trade, supply our weapons systems, fly our satellites into space, provide our network hardware, our business operating systems, store our documents in the cloud, give us satellite broadband, the dollar as a reserve currency, store our gold, provide our social media platforms, share intel etc. etc. is gone forever. The EU now has no choice but to look internally first for anything that is that even has a whiff of strategic importance. Even if the current administration rolled back everything today the damage is done and the EU has no choice in how they proceed in the long term and has to manage and mitigate the long term risk of being dependent for so much externally.

This could be worse for the US economy long term than even tariffmageddon.

What will be real interesting engineering problem to watch is where they physically host these new server farms for those services.

Is there a global provider for "cloud functions" (like Lambda) that isn't based in the US or CN?

There are many minor cloud provider that are just ready to make the leap. Europe is full of those.

Probably Bunny CDN with Edge Scripting.

Scaleway has serverless functions and they’re based in France: https://www.scaleway.com/en/serverless-functions/

This is not how hyperscaler economics works.

EU, UK, Switzerland, Norway have huge government innovation funds. Unfortunately they are mostly given to manage to politicians who are loyal, but not very bright, and possibly corrupt.

Now would be a perfect time to take advantage of the stupidity of Trump and channel these government investments into building European infrastructure providers (cloud and AI), but I very much doubt this will happen.

Without goverment support there is just no way in Europe to raise the capital that is required to compete with the American big tech.

EU assigned as commisioner of Startups, Research and Innovation a bulgarian politician called Ekaterina Zaharieva. Bulgaria is the poorest member of EU - shows you how much EU values startups, research and innovation.

On top of that Zaharieva is a member of the political party Gerb, well known for corruption. A few years ago somebody took pictures of their leader sleeping in his bedroom, surrounded with gold bars and stacks of euros. An ex-financial minister from Gerb is sanctioned for corruption under the Magnitsky Act.

> A few years ago somebody took pictures of their leader sleeping in his bedroom, surrounded with gold bars and stacks of euros.

Honestly, who doesn't do that?

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