EU threatens digital tax on American giants amid trade tussle
Ursula von der Leyen announced in an interview with the Financial Times the possibility of the European Union taxing American digital giants if negotiations with Donald Trump fail. "There’s a wide range of countermeasures," 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 in Trump's imposition of 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, 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.
"We are developing retaliatory measures," von der Leyen said. In the interview, she also clarified that these could include the first use of the EU anti-commercial instrument with the possibility of impacting service exports.
Von der Leyen added that Trump’s trade war had caused "a complete inflection point in global trade." "It’s a turning point with the United States without any question," she added, "We will never go back any more to the status quo".
"There are no winners in this, only losers," she concluded.
Will imports from China flood Europe?
In connection with Trump’s decision to delay tariffs for 90 days, including those directed at 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 about 23 billion dollars 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. She added that Brussels would "take safeguards" if imports from China suddenly rise in Europe.
