Washington Insider -- Thursday

Big Tech's Bipartisan Beating

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Trump Repeats He Could Boost Tariffs on China

President Donald Trump has again warned that the U.S. could hit China with tariffs on another $325 billion in goods.

"We have a long way to go as far as tariffs, where China is concerned," Trump said during a Cabinet meeting Tuesday. "We have another $325 billion that we can put a tariff on if we want."

As for China's pledge to buy U.S. ag products that Trump touted at the G20 summit in Osaka, Trump stated, "They are supposed to be buying farm products. Let's see whether or not they do."

From China, Foreign Ministry spokesman Geng Shuang told reporters that U.S. and Chinese negotiating teams have stayed in contact, labeling cooperation on trade with the U.S. as a mutually beneficial situation.

US, Japan could be aiming for ag/auto trade deal in September

U.S. and Japanese officials are working on a small trade deal that would involve agriculture and autos, Reuters reports, citing three unidentified industry sources familiar with the talks.

The deal could be agreed to by President Donald Trump and Japanese Prime Minister Shinzo Abe in September in New York. The pact could involve Japan offering U.S. farmers new access to markets in return for reduced tariffs on Japanese auto parts, the report noted, citing an auto industry official.

U.S. officials have been seeking increased access for U.S. beef and pork products as those two sectors are being negatively affected by other countries inking deals with Japan that give them more-favorable access to the Japanese market.

Thu. July 18 Washington Insider Big Tech's Bipartisan Beating

Bloomberg says this week that there is an unusual degree of bipartisanship in an unusually high criticism of "big tech." Facebook, Google and Amazon all are facing "multiple attacks across Washington from lawmakers and officials over a range of grievances that underscored the kind of reckoning the companies could face."

House Democrats on Tuesday grilled Amazon.com Inc. over perceived conflicts of interest on its platform, while senators from both parties slammed Facebook Inc. over its plan to introduce a cryptocurrency. Alphabet Inc.'s Google got broadsides from Senate Republicans who complained of anti-conservative bias and from the president who said he wants the Justice Department to look into its work in China.

The pressure isn't going away, Bloomberg says. Facebook Vice President David Marcus faced another day of testimony Wednesday answering questions about its Libra cyrptocurrency project from the House Committee on Financial Services. Panel chairwoman Maxine Waters, D-Calif., has called on the company to stop the project while Congress investigates.

The technology platforms that came under fire Tuesday were darlings of Washington in earlier years as they grew to dominate their respective markets, from online retail to social media to digital advertising. That admiration has evaporated amid criticism from Republicans and Democrats over competition, privacy and control over content on their platform. At the root of the concerns is the view the companies have grown too big and powerful.

Democratic Senator Sherrod Brown of Ohio called Facebook "dangerous" while Representative David Cicilline, D-R.I., portrayed Amazon as a "trillion-dollar" retailing behemoth that that can crush sellers on its platform. Senator Ted Cruz, R-Texas, suggested a Google was being evasive. "You're managing to be less candid than Mark Zuckerberg," he said, referring to the Facebook chairman and co-founder, who testified before Congress last year.

The scrutiny by lawmakers threatens to go beyond criticism of the companies. Across Capitol Hill Tuesday, lawmakers were zeroing in on specific aspects of the companies' businesses, raising the possibility of legislation aimed at toughening industry regulation.

Cicilline, who is leading a House antitrust investigation into competition in digital markets, told reporters that his inquiry "should eventually lead to legislative steps. Tech companies are incapable of regulating themselves," he said.

Cicilline's committee questioned executives of Google, Facebook, Amazon and Apple Inc. about whether they are harming competition. Amazon faced particular criticism with Cicilline suggesting its business model suffers from conflicts of interest and that it can use its control over data to thwart competition from third-party sellers on its platform.

Amazon lawyer Nate Sutton denied that the company uses data it collects on sales to favor its own products over third-party sellers. He also argued that it's common in the retail industry for stores to sell their own brands that compete against others.

Cicilline fired back: "The difference is Amazon is a trillion-dollar company that runs an online platform with real-time data on millions of purchases and billions in commerce and can manipulate algorithms on its platform and favor its own product--that is not the same as a local retailer," he said.

Cruz, fellow Republican Senator Josh Hawley of Missouri and Democrats Richard Blumenthal of Connecticut and Mazie Hirono of Hawaii cast doubt on part of a 1996 law that helped internet companies by providing the legal protections.

At the Senate hearing on Facebook's cryptocurrency project, lawmakers brought up the years of missteps over handling of data and user privacy and exploitation of its platform by Russia in the 2016 presidential campaign.

"I don't trust Facebook," said Senator Martha McSally, R-Ariz., "and I'm not alone." Brown, the committee's ranking Democrat, denounced the company, calling it "dangerous" and comparing it to a toddler with a book of matches.

Facebook has other problems in Washington, including a privacy investigation by the Federal Trade Commission. Last week, the FTC approved a $5 billion settlement to resolve the case, but lawmakers and privacy advocates objected, saying that it didn't go far enough.

Regulators were aghast that the tech giant wasn't able to address concerns about money laundering, consumer protection and other potential risks after Facebook presented a white paper to more than a dozen officials from the Treasury Department, the Securities and Exchange Commission and other agencies about the Libra project, the Washington Post reported Tuesday.

So, we will see if these criticisms lead to actual regulation. "The calls to break up, the calls for data privacy laws, the calls for concern around Libra and Calibra are all around this idea of the abuse of the dominance of the platforms, the lack of accountability," Ashkan Soltani, the former Federal Trade Commission chief technologist, said on Tuesday. These are important issues for producers and should be watched closely as the debate continues, Washington Insider believes.

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