Presidential action

MEMORANDUM FOR THE SECRETARY OF THE TREASURY

THE SECRETARY OF COMMERCE

THE UNITED STATES TRADE REPRESENTATIVE

THE SENIOR COUNSELOR TO THE PRESIDENT FOR TRADE

AND MANUFACTURING

SUBJECT: Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties Section 1. Purpose. In recent years, the gross domestic product of the United States’ digital economy alone, driven by cutting-edge American technology companies, has been bigger than the entire economy of Australia, Canada, or most members of the European Union. Instead of empowering their own workers and economies, foreign governments have increasingly exerted extraterritorial authority over American companies, particularly in the technology sector, hindering these companies’ success and appropriating revenues that should contribute to our Nation’s well-being, not theirs. Beginning in 2019, several trading partners enacted digital services taxes (DSTs) that could cost American companies billions of dollars and that foreign government officials openly admit are designed to plunder American companies. Foreign countries have additionally adopted regulations governing digital services that are more burdensome and restrictive on United States companies than their own domestic companies. Additional foreign legal regimes limit cross-border data flows, require American streaming services to fund local productions, and charge network usage and Internet termination fees. All of these measures violate American sovereignty and offshore American jobs, limit American companies’ global competitiveness, and increase American operational costs while exposing our sensitive information to potentially hostile foreign regulators. My Administration will not allow American companies and workers and American economic and national security interests to be compromised by one-sided, anti-competitive policies and practices of foreign governments. American businesses will no longer prop up failed foreign economies through extortive fines and taxes. Sec. 2. Policy. It is the policy of my Administration that where a foreign government, through its tax or regulatory structure, imposes a fine, penalty, tax, or other burden that is discriminatory, disproportionate, or designed to transfer significant funds or intellectual property from American companies to the foreign government or the foreign government’s favored domestic entities, my Administration will act, imposing tariffs and taking such other responsive actions necessary to mitigate the harm to the United States and to repair any resulting imbalance. In taking such responsive action, my Administration shall consider: (a) taxes imposed on United States companies by foreign governments, including those that may discriminate against United States companies; (b) regulations imposed on United States companies by foreign governments that could inhibit the growth or intended operation of United States companies; (c) any act, policy, or practice of a foreign government that could require a United States company to jeopardize its intellectual property; and (d) Any other act, policy, or practice of a foreign government that serves to undermine the global competitiveness of United States companies.