The Republic would oppose a European Union tax on US technology companies in any escalation of a trade war between the union and the United States, Taoiseach Micheál Martin has said in an interview with The Irish Times Inside Politics podcast.
Asked about a warning from European Commission president Ursula von der Leyen on Friday that the EU could hit the big tech firms such as Meta, Google and Facebook with a special tax – “a levy on the advertising revenues of digital services” – as part of “retaliatory measures” if trade negotiations failed, Mr Martin responded: “We would resist that.”
He added that it would cause damage to “a significant sector” in the State.
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Mr Martin suggested that the commission was signalling to Washington that it had a “bazooka” at its disposal in the shape of special powers to take action against US firms.
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“And I suspect that the president of the commission is saying to America, ‘look, that’s there’, that there’d be pressure on us to use this if we don’t get a satisfactory outcome,” he said.
But Mr Martin also added that the commission “has a different agenda as well, of course, that it wants to create its own resources” and the tax could create a revenue stream.
Micheál Martin interview: Ireland will ‘resist’ EU tech tax
He said tech companies were already “angry with Europe for what they perceive to be excessive regulation and antipathy from Europe towards them ... I think if you just throw another tax on them, you really are putting petrol on fire.”
On Saturday, Minister for Finance Paschal Donohoe also expressed opposition to the idea of a levy on tech companies, saying it would have “a harmful effect on our economy”.
“Ireland has not supported the use of digital sales taxes (DSTs) in the past and that remains our view,” Mr Donohoe told reporters in Warsaw where he was chairing a Eurogroup meeting of finance ministers.
Ireland wanted to make sure the EU reached a united view on a set of measures that “gets the balance right” between responding to the US threats without causing “undue harm” to members states’ economies, he continued.
While Ireland understood all measures should be assessed, Mr Donohoe said: “Our view is that DSTs would have a harmful effect on our economy and in doing that would also not get us to a place that we need to have a de-escalation, and find an agreement.”
In a signal of support to US pharmaceutical companies in the Republic, Mr Martin said he would be “sympathetic” to the efforts of big pharma companies to protect the lucrative years-long intellectual property (IP) window before drug patents expire.
“I think the companies would contest that the window for exploitation of IP research, basically, is narrowing too much and that needs to be broadened,” said Mr Martin.
“I’d be sympathetic to that. Historically, I have been, because I think you need investment in pure R&D [research and development] to produce a new pipeline of drugs. Ultimately, when you get beyond the window of exploitation [it] becomes a generic drug.”
Mr Martin said that pharma companies were “very, very worried” that they would be hit with new tariffs by the Trump administration, but he hopes that pharma will be included in trade negotiations between the US and the EU – which would mean new tariffs would be unlikely while that process was under way.
Meanwhile, Minister for Trade Simon Harris has said Europe would negotiate with the US “from a position of strength”.
“Europe has many strengths for a market of 460 million people, and of course, there are lots of tools available at our disposal,” said Mr Harris.
“Ireland doesn’t want to see us go there ... and certainly the tone I was getting in both Washington 24/48 hours ago and the tone and engagement that I get across the European Union suggests now is the moment to sit down and negotiate.”
Mr Harris said Europe needed “to continue to stay calm and measured in our response”.
Other voices in Europe also urged caution and moderation in the EU approach.
While France is seen as supportive of the European Union going after tech multinationals in any future tariff retaliation, the union’s other big beast, Germany, is urging caution.
German finance minister Jörg Kukies on Friday noted European businesses are hugely reliant on US tech services. “In many areas of digital services, especially for the corporate sector, if you look at data centres, if you look at the cloud ... there simply aren’t – unfortunately – sufficient alternatives to the offerings by the American digital industry,” he said.
