Interesting report from ITIF today:
The transatlantic alliance constitutes a central pillar for both the United States and Europe. But alliances do not imply acquiescence. When one partner adopts rules that disproportionately burden the other’s leading firms—especially in sectors central to economic and technological leadership—the affected partner has both the right and the responsibility to respond.
That is the situation that has now emerged in the European Union, for example, with the Digital Markets Act (DMA). Regulation is legitimate when it is neutral, evidence based, proportionate, and grounded in sound economics. It becomes a trade problem when it functions as a discriminatory tool. The European Union has every right to regulate digital markets—however flawed doing so may be as a policy choice—but it should expect retaliation if it pursues those objectives through rules that, in design or application, overwhelmingly target U.S. firms.
Although the ITIF report is more focused on competition than speech, we know from last week’s proposed trade action vs Brazil that the U.S. considers foreign censorship a relevant issue for Section 301.