Commentary: Big Tent Ideas

GROVER NORQUIST: Biden Enables Freeloading On American Innovation

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Democrats tend to increase the federal government’s power over American workers and businesses.

But now they want to grant European bureaucrats significant control over the American economy by imposing European regulations specifically designed to harm American companies.

The Biden administration has accomplished some of this agenda by executive fiat. Congress has a golden opportunity to put an end to this.

The European Union has long treated American companies like piggy banks to expand their social welfare state to the tune of tens of billions of dollars per year. The EU may be incapable of technological innovation, but it excels at inventing new ways to separate American companies from their money.

New forms of taxation like the “Digital Services Tax,” and regulation such as the “Digital Services Act” and “Digital Markets Act,” are explicitly designed to fleece American companies while exempting their European counterparts.

A 2022 study estimated that new DMA and DSA regulations would force American companies to pay between $22 and $50 billion in new compliance costs, borne by American households already suffering under high inflation. Failure to comply with the DMA regulation could result in fines totaling 10% of the annual turnover. Forking over all this money to EU regulators severely hampers the ability of American companies to compete on the global stage.

Instead of standing up for American jobs, the Biden administration undermines them on the global stage every chance it gets. In December, Justin Trudeau told the media that President Biden had no concerns with a new Canadian tax on mainly American streaming services. There was also no opposition from the Biden administration about Canadian content quotas harming American streaming companies. These are clear signals from the Biden administration to foreign governments that they can tax American companies at will. The Biden administration also not only caved to, but welcomed the Paris-based OECD’s “Global Minimum Tax” regime effectively ending tax competition and making it impossible for the U.S. to compete.

U.S. Trade Representative Katherine Tai recently announced that she is dropping longstanding U.S. digital trade demands made in 2019 by the Trump administration insisting that WTO e-commerce rules allow free cross-border data flows and prohibit national requirements for data localization and reviews of software source code. Tai’s announcement was a formal signal that the Biden administration is caving to progressive activists that would put American companies at a clear disadvantage – to the benefit of foreign adversaries.

USTR is not the only agency caving to foreign regulators. Biden’s Federal Trade Commission, led by progressive activist Lina Khan even sent staff to “assist” the EU with DMA implementation. In a hearing last year, Khan attempted to paint this collusion as “good governance.” To Biden, sending American bureaucrats to take marching orders from European regulators is good governance.

Lawmakers from both parties have denounced Tai’s abrupt reversal of decades of digital trade policy.

House Ways and Means Chairman Jason Smith (R-Mo.) said Tai’s withdrawal “surrenders the playing field to the Chinese Communist Party and abandons our closest trading partners.” In a letter, Senate Republicans said “Ambassador Tai makes clear…that foreign countries are free to discriminate against U.S. companies…Failing to stand up for America and against foreign discrimination—particularly from China—is contrary to the USTR mission.” Reps. Darin LaHood (R-Ill.) and Suzan DelBene (D-Wash.) said that Tai’s withdrawal was made “without the consent of Congress.”

The center-right community has widely panned Biden’s surrender to foreign regulators – 30 free market groups and activists joined a letter supporting Congressional efforts to undo Biden’s damage.

Lawmakers could start reining in these agencies by cutting their funding. In numerous congressional hearings, Khan has failed to detail what the FTC is doing with the taxpayer resources already at its disposal, let alone attempt to justify her professed need for hundreds of millions in additional funding. Tai uses the resources at her disposal to undermine American companies abroad, a clear violation of USTR’s charter.

Instead of defending American interests abroad, the Biden administration is doing everything in its power to undermine America’s leading industries. If left unchecked, Biden’s warped agenda will cripple the innovation and entrepreneurship that makes the American economy the envy of the world. Congress should step in and right the ship before it is too late.

Grover Norquist is president of Americans for Tax Reform.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.