Tech finds surprise ally in Trump amid high-stakes tax fight

Tech finds surprise ally in Trump amid high-stakes tax fight
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President TrumpDonald John TrumpCNN's Don Lemon explains handling of segment after Trump criticism NPR reporter after Pompeo clash: Journalists don't interview government officials to score 'political points' Lawyer says Parnas can't attend Senate trial due to ankle bracelet MORE is defending Google, Facebook and other big tech companies he's repeatedly railed against when it comes to France's digital tax, a position that underscores how Trump's policies on tech don't always match his fiery, antagonistic rhetoric.

Silicon Valley has applauded the Trump administration for condemning Europe’s efforts to tax the U.S. tech giants, but the situation has made for strange bedfellows as the president continues to galvanize his base by claiming companies like Facebook and Twitter are out to get him.

Some tech industry sources say it’s part of a long-standing dynamic: Trump lambasts the companies in public but his “America first” administration often defends them as valuable U.S. businesses. 


“There’s sometimes a delta between the rhetoric and the policy actions,” a tech industry source told The Hill. “But I’d say that’s probably true beyond just the tech industry. The relationship is probably better than people suspect."

Democrats point to the tension as evidence that his feud with “Big Tech” is largely personal, rather than built around concerns about the corporations’ enormous power and influence.

“It's not always clear what the president's basis for criticism [of Big Tech] is,” Rep. David CicillineDavid Nicola CicillineHouse lawmakers urge adoption of UN report's recommendations on battling anti-Semitism Hillicon Valley: Biden calls for revoking tech legal shield | DHS chief 'fully expects' Russia to try to interfere in 2020 | Smaller companies testify against Big Tech 'monopoly power' Smaller companies testify against Big Tech's 'monopoly power' MORE (D-R.I.) told reporters this week, saying it seems to come from “personal frustration” rather than concerns about the companies’ “market dominance or anticompetitive behavior.”

On Monday, the U.S. Trade Representative (USTR) proposed billions of dollars in tariffs to retaliate against France’s digital services tax, finding that it unfairly discriminates against U.S. tech companies like Amazon and Google. The French digital services tax will hit about 30 companies, most of which are based in the U.S. 

Trump then raised the issue directly with French President Emmanuel MacronEmmanuel Jean-Michel MacronGerman president expresses 'sorrow' for Holocaust, warns 'spirits of evil' are rising Hillicon Valley — Presented by Philip Morris International — Apple reportedly dropped plans to let iPhone users encrypt backups | Justices decline facial recognition case | Critics fear Facebook losing misinformation fight | Truce on French tech tax On The Money — Presented by Wells Fargo — Trump at Davos warns Europe on trade | President boasts about US economy to global elite | Experts say Trump trade victories may yield little growth MORE, who has vowed to push ahead with the tax despite the threat of tariffs of up to 100 percent on $2.4 billion of French products, including French wines and cheeses. 

The USTR is threatening to take similar actions against other European countries considering a digital services tax, throwing the weight of the administration behind the tech industry in a fight with billions of dollars and the future of taxation during the Internet age at stake. 


"There is a place where they’re rallying behind us," a tech industry source said. "The president has said while he doesn’t like us, 'they are American companies' — so it does align with his 'America first' stuff."

A White House official called Trump’s position “consistent” as he backs the industry’s business interests.

“The president has been consistent that he will not sit idly by as foreign powers double and triple tax our technology firms,” the official told The Hill on Friday. 

Trump acknowledged the tension around his decision to defend the companies on Tuesday. "The tech companies you’re talking about, they’re not my favorite people because they aren’t exactly for me, but that’s okay," Trump told Macron. “I don’t care.

“They’re American companies,” he continued. “And we want to tax American companies. ... That’s important. We want to tax them. That’s not for somebody else to tax.”

The president’s threats against the tech industry have largely stopped at rhetoric, critics pointed out, and he’s yet to enact policies directly hacking away at their unprecedented size and power.

It’s not the first or last time the Trump administration has stood behind Big Tech. For months, the White House has hammered China for stealing the U.S. tech industry’s intellectual property, demanding significant changes to Beijing’s IP practices before any trade deal. Several provisions in Trump’s landmark 2017 tax law were a boon to tech firms like Apple, Microsoft and Google. And his daughter and senior adviser, Ivanka TrumpIvana (Ivanka) Marie TrumpTrump hits CNN's Lemon over segment mocking supporters: 'Dumbest man on television' Overnight Energy: Study finds 'forever chemicals' in more locations | Trump officials approve Keystone XL pipeline right-of-way | Warren asks banks for climate plans Gore praises Greta Thunberg after meeting: 'Nobody speaks truth to power as she does' MORE, received an award and glowing accolades this year from Silicon Valley’s top trade group, the Internet Association, for her work expanding coding education in schools across the country, a top policy issue for companies like Facebook and Google.

“The Trump Administration recognizes that the internet industry is a great American industry, supporting 6 million jobs and $2 trillion in GDP,” Noah Theran, a spokesman for the Internet Association, said in a statement. 

Yet, in speeches and online posts, Trump has dubbed Facebook “anti-Trump,” called Twitter “terrible,” spread conspiracy theories implying that Google is left-leaning and carried out a personal vendetta against Amazon CEO Jeff BezosJeffrey (Jeff) Preston BezosHillicon Valley — Presented by Philip Morris International — NFL social media accounts hacked | Dem questions border chief over controversial Facebook group | Clinton says Zuckerberg has 'authoritarian' views Overnight Energy: Sanders scores highest on green group's voter guide | Trump's latest wins for farmers may not undo trade damage | Amazon employees defy company to speak on climate change Hundreds of Amazon employees defy company policy by speaking out about climate MORE. Amazon is suing the Department of Defense over allegations that it was influenced by Trump’s personal antagonism towards Bezos when it decided to award a $10 billion cloud-computing contract to Microsoft over Amazon.

At a so-called White House “social media summit” in July, Trump alleged that all of the social media companies together exhibit “censorship like nobody can believe,” speaking to a room of right-wing Internet personalities. And in August, reports emerged that White House staff was circulating drafts of an executive order that would have clamped down on the alleged anti-conservative bias exhibited by top social media companies. 

But, in the past year alone, Trump has also met privately with Google CEO Sundar Pichai, Facebook CEO Mark ZuckerbergMark Elliot ZuckerbergHillicon Valley — Presented by Philip Morris International — NFL social media accounts hacked | Dem questions border chief over controversial Facebook group | Clinton says Zuckerberg has 'authoritarian' views Clinton says Zuckerberg has 'authoritarian' views on misinformation Hillicon Valley — Presented by Philip Morris International — UN calls for probe into alleged Saudi hack of Bezos | Experts see effort to 'silence' Washington Post | Bezos tweets tribute to Khashoggi MORE, and Twitter CEO Jack Dorsey.

“There are areas of policy where we agree and disagree with every administration, but we are always vocal about the importance of U.S. policy continuing to enable American leadership in technology,” Theran, of the Internet Alliance, said. 


Those sprawling contradictions have set up a tense, and oftentimes unpredictable, relationship between Trump and Silicon Valley. “I think every company takes it quite seriously when the president of the United States says something about them specifically because many times when that happens, there is some sort of follow-up action about it,” one tech industry source said.

Sen. Josh HawleyJoshua (Josh) David HawleyLawmakers warn US, UK intel sharing at risk after Huawei decision GOP senator plans to ask about Bidens, whistleblower in impeachment trial Overnight Health Care: Trump becomes first sitting president to attend March for Life | Officials confirm second US case of coronavirus | Trump officials threaten California funding over abortion law MORE (R-Mo.), a Trump ally who has made a name for himself as the Republican party’s top tech critic, told reporters this week that Trump’s threats have teeth. He pointed out that the Department of Justice is actively investigating Big Tech’s market dominance and power.

“They're under investigation for potential antitrust violations — Facebook is, Google is — by the president's Department of Justice,” Hawley said with a smirk. “I'd be a little more concerned if I were them.” 

Trump's real issue with the French digital taxes, according to Rep. Matt GaetzMatthew (Matt) GaetzGaetz in Twitter battle with Florida House Republican Apple under pressure to unlock Pensacola shooter's phones Conservatives slam Warren's call to put transgender women in women's prisons MORE (R-Fla.) — who often promotes Trump’s messages on Capitol Hill — is that they came from another country. 

“I would describe the dynamic as similar to that of a family,” Gaetz said.

“We're okay picking on our family members," he said. "But we don't like it when other people do.”