A levy on the digital advertising revenues of tech multinationals has not been ruled out if negotiations to suspend US tariffs fail, European Commission president Ursula von der Leyen has said.
The EU agreed to delay the introduction of counter-tariffs on imports of certain US goods after US president Donald Trump announced a 90 day “pause” on higher rates of US tariffs.
Mr Trump partially scaled back sweeping tariffs he had put on nearly all US trading partners after financial markets nosedived.
The European Commission, the EU’s executive arm that sets trade policy, responded by suspending its counter-tariffs for 90 days.
It emerged on Friday that European trade commissioner Maroš Šefčovič is to travel to Washington on Sunday for talks.
“The trade commissioner is going to Washington to try and sign deals. That is what we are focused on. All options are on the table should that not lead to a good outcome,” European Commission trade spokesperson Olof Gill told RTÉ radio on Friday.
EU tariffs of up to 25 per cent on US soybeans, oranges, steel and other products had been due to take effect in three phases on April 15th, May 15th and December 1st.
European politicians and officials hope the pause will allow time for a deal between the US and EU to permanently suspend the tariffs Mr Trump hiked up on imports to the US since returning to office.
Tariffs, which are effectively taxes to import goods, are seen by Mr Trump as a way to rebalance unequal trading relationships and force industry to relocate back to the US.
Dr von der Leyen said nothing was off the table if negotiations broke down. “There’s a wide range of countermeasures...an example is, you could put a levy on the advertising revenues of digital services,” she told the Financial Times in an interview.
France has been one of the EU states pushing for the commission to go after US tech firms, as a way to turn the screw on the White House in the trade dispute.
Senior commission officials had been examining the idea as one possible option if the EU needed to ramp up pressure.
The Government is firmly opposed to digital services being targeted in any EU-US trade war, given the large concentration of US tech and social media multinationals with European headquarters in Dublin.
Jörg Kukies, Germany’s finance minister, struck a note of caution when asked about the suggestion.
“In many areas of digital services, especially for the corporate sector, if you look at data centres…there simply aren’t – unfortunately – sufficient alternatives to the offerings by the American digital industry,” he said.
Mr Trump’s recent climbdown means nearly all goods sold from EU states to the US will be charged a 10 per cent tariff, rather than 20 per cent. Previous 25 per cent tariffs put on imports into the US of steel, aluminium, automobiles and car parts remain in place.
Speaking on Friday, Minister for Finance Paschal Donohoe said Dr von der Leyen had “outlined that many different options need to remain on the table” in how the EU could respond should talks break down.
“What she has also outlined, which is the clear view of all of the governments that I engage with, is that we want to negotiate first, and we want to respond back to developments that happen across the world in a very proportionate and strategic way,” he said.
Mr Donohoe, speaking in Warsaw where he was chairing a Eurogroup meeting of finance ministers, said the EU would use the 90 day pause to “engage in a constructive way with the United States”.
