+COMMENT US president Donald Trump has threatened to impose extra tariffs on imports from any nation that dares to regulate American technology companies.
Trump took to Truth Social on Monday evening to declare “As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies.”
“Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology. They also, outrageously, give a complete pass to China's largest Tech Companies,” he added.
“This must end, and NOW!” his post continued, before promising “substantial additional Tariffs” on any nation that dares to persist with regulations, plus “Export restrictions on our Highly Protected Technology and Chips.”
“America, and American Technology Companies, are neither the ‘piggy bank’ nor the ‘doormat’ of the World any longer,” he added, before wrapping things up with a demand to “Show respect to America and our amazing Tech Companies or, consider the consequences!”
Bending the Truth
The post makes no mention of the following known facts about American Big tech companies:
Most are extraordinarily profitable;
Most use legal-but-cynical schemes to minimize tax, which is why many nations devised digital services taxes and other measures to ensure Big Tech pays its share;
The USA pulled out of the OECD’s comprehensive tax reforms, which aimed to prevent global companies – especially tech companies – from using legal-but-cynical schemes to minimize tax. Doing so meant other nations who wanted to tax Big Tech needed to consider other measures;
Several American tech companies are proven monopolists who abused market power at home and abroad;
Several offer services known to be harmful – especially social media companies – creating problems that other nations must pay to fix;
Chinese companies do not get a free pass: Many nations have regulated them with acts such as banning Huawei. Europe just took a swipe at AliExpress. We could go on but you get the idea;
Trump himself has given Chinese company ByteDance and its social network TikTok a free pass by declining to enact a law that required it to divest its US operations or shut up shop stateside by January 19th, 2025. US Congress passed that law after finding TikTok is a threat to national security.
We could go on, but you get the idea. America’s tech companies are immensely powerful, efforts to rein them in have seldom succeeded, and China does not get a free pass.
EU may target US tech giants in tariff response FROM THE ARCHIVES
Trump has made threats like this before, but this time he has raised the stakes by adding the prospect of tech export bans.
Such bans would likely harm other US tech companies. Chipmakers aren’t subject to digital services taxes, and lost billions when the administration banned sales of all GPUs to China. A comprehensive tech export ban could defend Google and Meta by hurting Intel – which the USA now partially owns – and the likes of Nvidia and AMD.
Recent history suggests two possible outcomes: The world will try to negotiate with Washington about this matter and end up making modest concessions the president claims as a win, or nothing happens because Trump’s posts are often thought bubbles. ®