EU readies measures against American tech companies
The European Union (EU) is gearing up for a strategic response to potential U.S. tariffs on EU services, particularly in the tech and financial sectors. The EU's approach involves the utilisation of its anti-coercion mechanism, a powerful trade tool known as the "bazooka," which could impose targeted taxes or tariffs on U.S. tech giants.
The EU is ready to adopt proportionate countermeasures if ongoing trade negotiations with the United States fail to produce a mutually acceptable resolution by August 1, 2025. If negotiations break down, the EU is also re-evaluating additional tariffs on a broad range of U.S. goods and considering import restrictions on products like steel scrap and selected chemicals.
The EU's preparatory process for these measures has included public consultations and stakeholder input, reflecting a careful assessment of the economic balance and the sectors that might be most affected by U.S. tariffs, including technology and financial services.
The EU member states support the Commission's efforts to reach an agreement before taking retaliatory action. France, in particular, is advocating for the use of the anti-coercion mechanism as a response to potential trade conflicts with the U.S., and is urging Brussels to take a firm stance in trade negotiations.
Maros Sefcovic, the EU's chief trade negotiator, held talks in Washington with U.S. counterparts. However, details of these meetings are not yet provided by the Commission.
The activation of the anti-coercion mechanism takes several months to take effect. If implemented, the EU's response could be staged, starting with the gradual taxation of U.S. products and potentially moving on to services.
One diplomat suggested that the EU could respond firmly to the U.S. tariffs. The EU, however, is keeping all options open in response to the U.S. tariffs, indicating a willingness to engage in diplomatic efforts before resorting to retaliatory measures.
In summary, the EU plans a multifaceted response incorporating dialogue, temporary suspension of tariffs for negotiation leverage, and readiness to implement countermeasures targeting U.S. goods and key service sectors like tech and finance if dialogue fails. The EU's approach reflects its intent to show strength and resolve in negotiations while protecting its economic interests in the service sectors heavily dominated by technology and financial services firms.
- The EU's approach towards potential U.S. tariffs extends to business sectors, specifically tech and financial services, as it seeks to counterbalance any such measures through the utilization of its anti-coercion mechanism, targeting U.S. tech giants with taxes or tariffs.
- In the wake of ongoing negotiations with the United States, the EU is ready to employ a range of strategies, including general-news worthy measures such as imposing additional tariffs on U.S. goods and considering import restrictions, while also engaging in diplomatic dialogue, to protect its economic interests in key service sectors like technology and finance.
