EU to flex trade muscles: Potential tax on US digital giants
Ursula von der Leyen announced in an interview with the Financial Times that the European Union could tax American digital giants if negotiations with Donald Trump fail. We have a wide range of measures, said the President of the European Commission.
The European Union is preparing to use its most powerful trade tools, including imposing levies on American digital companies, if negotiations with Donald Trump do not succeed. In an interview with the Financial Times, the President of the European Commission emphasized that the EU aims for a "completely balanced" agreement with Washington during the 90-day pause from additional tariffs that Trump placed on countries worldwide.
EU and the nuclear option in trade battle with the USA
Von der Leyen warned that Europe would be ready—in the event of a trade confrontation—to impose a tax on revenues from digital advertising, which would affect American digital giants such as Meta, Google, and Facebook.
"If negotiations are not satisfactory, our countermeasures will kick in," von der Leyen said. In the interview, she also clarified that these could include the first use of the EU anti-commercial instrument, possibly impacting service exports.
There’s a wide range of countermeasures . . . in case the negotiations are not satisfactory," the President of the European Commission told the Financial Times.
Von der Leyen noted that Trump's trade war caused a "complete turning point in global trade." "There are no winners in this, only losers," she added, referring to the turmoil in stock and bond markets.
Will imports from China flood Europe?
In connection with Trump’s reversal and delaying tariffs for 90 days, including towards the EU, the Commission halted the planned retaliatory measures with tariffs on steel and aluminum that were imposed last month. These measures were set to affect approximately $31 billion CAD of American imports, including poultry, orange juice, and yachts. She emphasized that in the narrative about Europe’s trade surplus over the USA, Americans overlook an important aspect.
"Companies that offer services make a good business in this [EU] market. And the vast majority of the services, 80 per cent of the services are coming from the US. So again, we want a negotiated solution that is the best for us, all of us," von der Leyen said.
She also stressed that the EU "will not tolerate" the redirection of Chinese goods subject to American tariffs to Europe (a 10% "base" tariff applies to the EU in the USA - ed.). She added that Brussels "will take precautionary measures" if imports from China suddenly increase in Europe.
