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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 TrumpMinnesota certifies Biden victory Trump tells allies he plans to pardon Michael Flynn: report Republican John James concedes in Michigan Senate race 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. 

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“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 Democrats pick Aguilar as No. 6 leader in next Congress Nominated for another Speaker term, Pelosi says it's her last Katherine Clark secures No. 4 leadership spot for House Democrats 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 MacronTrump addresses virtual G-20 summit, heads out before session on pandemic G-20 leaders stress importance of united response to coronavirus pandemic Czech president says Trump should quit after election loss and 'not be embarrassing' 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. 

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"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 TrumpWomen set to take key roles in Biden administration New York expands Trump tax fraud investigations to include write-offs: report Lara Trump mulling 2022 Senate run in North Carolina: report 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 BezosElon Musk passes Bill Gates to become world's second-richest person in Bloomberg rankings How space exploration will help to address climate change Bezos makes first donations from billion Earth Fund 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 ZuckerbergDemocrats urge YouTube to remove election misinformation, step up efforts ahead of Georgia runoff Democrats press Facebook, Twitter on misinformation efforts ahead of Georgia runoff Hillicon Valley: Facebook content moderators demand more workplace protections | Ousted cyber official blasts Giuliani press conference | Tech firms fall short on misinformation targeting Latino vote 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. 

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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 HawleyDemocrats brush off calls for Biden to play hardball on Cabinet picks Rush Limbaugh lauds Hawley: 'This guy is the real deal' Trump told advisers he could announce 2024 bid shortly after certification of Biden win: report 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) GaetzFlorida passes 850k coronavirus cases Florida GOP Rep. Mike Waltz tests positive for COVID-19 Gaetz says he has coronavirus antibodies 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.”