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 TrumpTrump PACs brought in over M for the first half of 2021 Chicago owes Trump M tax refund, state's attorney mounts legal challenge Biden hits resistance from unions on vaccine requirement 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 CicillineLobbying world Progressive fighting turns personal on internal call over antitrust bills Top Democrat leads bipartisan trip to Middle East 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 MacronFrench parliament approves COVID-19 passes for restaurants, domestic travel WhatsApp chief: US allies' national security officials targeted with NSO malware US athletes chant 'Dr. Biden' as first lady cheers swimmers 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 TrumpIvanka TrumpKushner launching investment firm in move away from politics: report Washington Post calls on Democrats to subpoena Kushner, Ivanka Trump, Meadows for testimony on Jan. 6 Jill Biden takes starring role at difficult Olympics 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 BezosIt's time for US to get serious about cleaning up space junk Press: Give those unemployed writers a job! Progressive group launches M ad campaign to call for tax hikes on the rich 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 tech CEOs to combat Spanish disinformation Activists protest Facebook's 'failure' on disinformation with body bags outside DC office Budowsky: How Biden can defeat COVID-19 for good 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 HawleyBiden's bipartisan deal faces Senate gauntlet 228 Republican lawmakers urge Supreme Court to overrule Roe v. Wade Trio of Senate Republicans urges Supreme Court to overrule Roe v. Wade 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) GaetzPhotos of the Week: Olympic sabre semi-finals, COVID-19 vigil and a loris The Hill's 12:30 Report - Presented by Facebook - CDC equates Delta to chickenpox in contagiousness Gaetz, Greene and Gohmert turned away from jail to visit Jan. 6 defendants 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.”