The European Union has faced a delicate task in plotting its response to Donald Trump’s tariffs. While Trump has suspended his so-called reciprocal tariffs for 90 days, both sides are now set for trade talks.
So far, the EU has largely targeted products sourced from politically sensitive US states, mostly when they have voted for Republican politicians, when tariffs are put in place.
That may be about to change. European Commission president Ursula von der Leyen has not ruled out taxing the likes of Google, Amazon, Meta and Elon Musk’s X and the like if trade talks with the Trump administration fail.
“There’s a wide range of countermeasures ... you could put a levy on the advertising revenues of digital services,” she told the Financial Times.
This could have profound implications for Ireland.
As the European base for swathes of US Big Tech, with thousands of well-paid jobs in the sector and not to mention the billions in tax revenue the State takes in every year, this country would clearly take a hit from any move to penalise tech firms in some way. The Government knows this and so far as opposed such a move.
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That’s not to say the EU shouldn’t do something. Countries such as France have long bridled at the fact that much of those firms’ European tax is paid in the Republic and have been, reportedly, pitching for a levy on Big Tech in any trade war.
It would also be a way to target a group of companies whose bosses – most notably Musk and Meta’s Mark Zuckerberg – have cosied up to Trump.
But would consumers wear it? It’s an uncomfortable truth for Europe that there is almost no competitor on the Continent to the American firms. Sure, there are bit players here and there, but that’s all they are. And that’s before we consider the implications of targeting services in general.
If anything is done to target US firms in this State, would people accept, for example, not using Gmail or Instagram? How about WhatsApp? Such issues will have to be taken into account before any such move is instigated.
A levy makes sense on paper. The real world may not be so straightforward.
