EU poised to tax tech giants if trade talks falter
In an interview with the Financial Times, Ursula von der Leyen indicated that the European Union might impose taxes on major American tech companies if talks with Donald Trump do not lead to an agreement. She emphasized that the European Commission has numerous tools at its disposal to address the situation.
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 emphasised that the EU aims for a "completely balanced" agreement with Washington during Trump's 90-day pause in imposing additional tariffs on countries around the world.
EU and the nuclear option in trade battle with the USA
Von der Leyen warned that Europe would be ready to impose a tax on revenues from digital advertising in the event of a trade confrontation, 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, which could impact service exports.
"There’s a wide range of countermeasures . . . in case the negotiations are not satisfactory," the President of the European Commission told "FT."
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 aluminium imposed last month. These measures were set to affect about £18 billion of American imports, including poultry, orange juice, and yachts. She emphasised that Americans overlook an essential aspect in the narrative about Europe’s trade surplus over the USA.
"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 rise in Europe.
