The U.S. government must not allow the European Union to unfairly penalize the crown jewels of the U.S. economy: big tech companies like Apple, Amazon, Facebook, and Google.
I note this in light of the E.U. pursuit of a new tax that specifically targets big U.S. tech companies. As the BBC notes, the proposal would impose a "3 percent tax on the revenues of large internet companies with global revenues above €750 million ($864 million) a year." That earnings floor would only affect the U.S. companies which - due to their investment and skill - now dominate the tech market. At the same time, the tax would allow smaller European tech firms to gain an unfair advantage over their larger U.S. counterparts. In turn, it's clear that this proposal is nothing more than protectionism.
So what should be done?
Well, President Trump should warn the Europeans against this course of action. And if they persist with the tax protectionism, the president should respond in kind. He has ample opportunity to do so.
First off, the E.U. is desperate to avoid a broader spillover of trade tensions. E.U. economies are growing far less aggressively than the U.S. economy so Brussels feels less space to take risks with a high-stakes trade war with Trump. That concern is heightened by the president's unwillingness to blink in his trade war with China. At the same time, European governments fear that sustained economy doldrums will risk new Brexit-style movements to leave the trading bloc. Trump should use that worry to target European professional service firms and high-value tech/software companies that do business in the U.S. Alternatively the president might target the E.U.'s aviation sector.
Ultimately, however, Trump should show that he has paid notice of what the E.U. is up to. This latest tax proposal fits in a broader portfolio of protectionist measures targeting the U.S. economy. It must not stand.