There’s not much chat about this publicly in the tech media, but get a savvy tech investor or founder into a private conversation, and they all have views about a critical question…

What if it becomes much harder to scale a UK tech startup in the USA?

I need to tread carefully here. I want to keep this article focused specifically on the exact topic. While I have strong views about the direction the USA is going, it’s easy to get accused of simply disliking Trump’s politics.

But this isn’t a question of politics, or of whether government spending should be cut, or what to do about immigration, or tax, or trade. Those are political topics I will pass no judgement on here.

Instead, my concern is purely practical for the UK and European tech industry.

It’s a very real observation that the world is changing quickly, and where it will end up is extremely difficult to predict.

But one thing’s for sure, the status quo for international business relations with the US is disappearing, and the tech industry needs to be ready.

• Will a startup at the beginning of its journey, like the ones we cover here on PreSeed Now, be able to credibly have ‘scaling into the US market’ as its strategy for achieving the venture-scale returns its future investors will be seeking?

• Will UK and European VCs be able to raise new funds as easily if scaling into the US market becomes significantly more difficult?

What’s the problem?

The Trump administration has rapidly moved to change pretty much everything we fundamentally understand about the USA.

While not all of these factors is directly related to scaling a startup, they can undoubtedly have an impact.

Democratic norms are under threat: America has long thought of itself as a robust democracy, with checks and balances built into the system to keep the executive branch, the legislative branch, and the judicial branch in check.

But it turns out that all it takes the President to start firing off spicy executive orders to put that balance under strain.

Some of Trump’s executive orders have been described as unconstitutional by many, including judges. I mean, a third term..? Given the climate in the States right now, it’s not exactly clear that being unconstitutional will stop them staying in place.

What’s more, credible experts are describing events in the US as authoritarian. “We’re pretty screwed”, said one expert on the topic of strongmen leaders recently.

And it turns out that all of America’s rules, checks, and balances mean nothing if they’re not followed in good faith. Some see a future for the US that looks more like Hungary than a thriving democracy.

Legal norms are under threat: Judges are being ignored or threatened. Lawyers are being threatened and cowed into offering pro bono legal services to the government, or not working for people who want to sue the government. In the business world, ABC settled a case with Trump that it could have won.

• How can a legal system function reliably for businesses when ‘fear the President’s wrath’ seems to be the vibe of the moment?

• Can a business expanding into the country expect a smooth ride?

Research is under threat: Research grant funding has been paused or cut, with labs across the US under threat. Academics are leaving the country, and foreign students are having their visas revoked for participating in legal protests.

There might not be a widespread exodus yet, but countries around the world are poised to capitalise on an anticipated ‘brain drain’ from the US.

American deep tech research is critical to scientific progress in all sorts of fields, and it’s being treated as an unnecessary expense for the public purse.

As the New York Times put it this week, “since World War II, US research funding has led to discoveries that fuelled economic gains. Now cutbacks are seen as putting that legacy in jeopardy… To economists, the policies threaten to undermine US competitiveness in emerging areas like artificial intelligence, and to leave Americans as a whole poorer, less healthy and less productive in the decades ahead.”

• Can UK deep tech startups expect to tap into a deep talent pool if they expand to the US?

Immigration is under threat: Immigration is a cornerstone of the USA’s success, but amid widespread deportations and people being turned away at the border, the USA might seem like a less appealing place to move to.

Already an immigrant of seemingly good standing, living in the US? You still might have your social media accounts checked for whatever the government might find distasteful. That might be pro-Palestinian opinions at first, but even if you’ve never posted about the Middle East, what might be next?

All of this could affect the country’s talent pool. Even if you are welcomed in as a skilled individual, do you really want to risk being shipped off to a foreign prison camp (perhaps mistakenly) without due process?

• Will entrepreneurs really want to expand into the US if they feel they are always going to be personally at risk from the whims of the government?

International relations are under threat: Whether it’s invasions of so-called allies, devastatingly harsh trade tariffs, or voicing support for destabilising politicians in Western democracies, The ‘Trump II’ era has shaken up the world order in a truly shocking way.

Canada has swiftly put its elbows up in the face of tariffs and threats of invasion, no longer an unconditional ally of its neighbour to the south. And Europe has begun to pull together on defence in a way that seemed unthinkable mere months ago.

In the UK, phrases like “American divorce” are being thrown around, no matter how much the UK government tries to lean into whatever might remain of the ‘special relationship’ and plot a cautious path.

• How does a startup plan to scale internationally in the face of such uncertainty?

Will it get worse?

It’s easy to look at how Trump’s first term went and assume that the worst of his grandstanding will turn into a whole lot of nothing.

Surely he’ll roll back the more extreme of his excesses and re-learn to maintain a modicum of diplomacy? With a recession increasingly likely, won’t political pressure push him to row back?

Will election results like this week’s in Wisconsin persuade Trump that his project is unpopular and Elon Musk’s support isn’t always a golden ticket?

Maybe. One report yesterday suggested he might be getting ready to ditch Musk.

But he’s already going much further than he did last time, and the team around him is far less chaotic. They’ve had years to plan for this opportunity. The career government officials who steadied the ship last time are either being fired or ignored. And fealty to Trump is clearly a prerequisite for success in US Republican politics right now.

So why WOULD he stop? This is the opportunity of a lifetime to act out the worldview he’s been shaping for decades. And those around him, such as Elon Musk and Stephen Miller, are very much on board with reshaping the world, even if their personal motivations might vary.

But even if Trump stopped now and made no more changes, or even rolled back most of what he’d done, one thing would not have changed.

TRUST in the United States, and trust in the post World War II world order, has been shaken to its core. What many thought were rigid certainties about the way the world works have been undone in a matter of weeks.

Sure, the UK was spared the worst of the latest tariffs and might get some kind of trade deal soon, but all of the chaos above still applies.

What can founders, startups, and the tech industry do?

I’ve talked to founders and investors off the record about this over the past few weeks.

Most of them are taking pretty much the only approach it’s possible to have: keep calm and carry on.

After all, it’s still possible to do business with the US, and it’s still possible to scale into the US.

Encouraging co-founders or staff to move over might be more difficult than it used to be, though. The number of conversations I’ve had with people who say they have no desire to travel to the US for any reason would have been unimaginable not so long ago.

But assuming the will is there, and investors on the board are pushing it to happen, there’s nothing about the current situation to think UK startups will stop scaling into the US in the immediate future.

But still, the fact remains things COULD get a lot worse.

And so…

• Startups should at least consider developing alternative growth plans that don’t involve the US market, just in case.

• Investors should investigate scaling playbooks that get them a route to the exits they need while avoiding the US.

• Europe needs to get its act together and invest more in deep tech. Not just defence tech, but more broadly in the scientific research that underpins a wider range of groundbreaking startups that can provide a proprietary edge of the region over the rest of the world. The UK now has its own version of DARPA, but the EU needs one too.

• Europe (I’m including the UK here because regardless of Brexit, aligning more with the EU makes sense in the face of a hostile US) needs to make it easier for tech founders to start up, grow, and trade within the region. It needs to build and strengthen trade relationships with friendly nations around the world, too.

It feels crazy writing an article like this, and I suspect that 50% of readers will be nodding along in agreement while 50% will be thinking I’ve gone insane and everything will be fine.

But the world looks a lot different now to how it did at the start of the year, and it’s only April. So it’s worth considering… right?

🤔 What do you think?

I’d love to hear your thoughts. Are you worried? Do you think ‘it’s always worked out fine so why would this time be different’? Are you planning for disaster but hoping for the best? Or are you cheering Trump on and hoping Europe follows his lead?

Share with me what you think about how UK startups should think about scaling into the US in 2025:

I look forward to hearing from you!

Back next week

Normal service resumes next week with a couple of very interesting startup profiles for you on Tuesday and Thursday morning.