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Germany and other European countries have cautioned against Brussels potentially hitting Big Tech if trade negotiations with the Trump administration fail over the next few months.
US President Donald Trump earlier this month said he would impose a 20 per cent “reciprocal tariff” on all EU imports, which has since been reduced to 10 per cent over a 90-day period in which he is seeking talks with global partners.
European Commission president Ursula von der Leyen in an interview with the Financial Times said Brussels was readying retaliatory measures should these talks fail, including a possible tax on digital advertising revenues that would hit tech groups such as Amazon, Google and Facebook.
But Germany on Friday cautioned against such a move.
“We simply have to be cautious with digital corporations because we have no real alternatives to the offering by the American digital industry,” said German finance minister Jörg Kukies, mentioning data centres for cloud services and artificial intelligence.
“There are products where the ability to substitute from other services and other goods from other regions of the world is easy, and there are sectors where it is more difficult,” he said ahead of a meeting of European finance ministers in Warsaw to discuss the economic impacts of trade tensions.
Kukies said that the bloc should prepare retaliatory measures, but added: “We just have to be nuanced and differentiated.”
The EU has suspended its own retaliatory tariffs on US products such as yachts, motorcycles, clothing and foodstuffs for 90 days to allow for the talks to play out. Those levies had been imposed in response to Trump imposing 25 per cent tariffs on European steel and aluminium, which remain in place.
France and most other EU member states support von der Leyen’s decision to draw up retaliation options on US services companies, according to people briefed on discussions between capitals. But countries with a large US tech presence such as Ireland and Luxembourg are more reticent.
Eric Lombard, the French finance minister, told the FT: “We have said everything is on the table. Among the set of measures that we could take there could be measures that concern the digital industry. It is one of the elements on the table.”
He added that the measure had not yet been decided and that the first objective remained “to reach an agreement with the Americans”.
French President Emmanuel Macron has also raised the possibility of hitting digital services — an area that, contrary to trade in goods, the US enjoys a large surplus with the EU.
EU economy commissioner Valdis Dombrovskis on Friday also said that “when we are discussing the trade response we obviously have to look also at trade in services including digital services”.
Poland’s finance minister Andrey Domański, who chaired the discussions in Warsaw, appealed to the bloc to “remain united”. “We would rather prefer to first hear the Commission official proposal and then to comment,” he said.
