The Trump administration threatened retaliation against the European Union in response to efforts to tax American tech companies, singling out prominent companies, including Accenture Plc, Siemens AG and Spotify Technology SA, as possible targets for new restrictions or fees.
Processing Content
“If the EU and EU Member States insist on continuing to restrict, limit and deter the competitiveness of U.S. service providers through discriminatory means, the United States will have no choice but to begin using every tool at its disposal to counter these unreasonable measures,” the Office of the U.S. Trade Representative said in a social media post on Tuesday.
“Should responsive measures be necessary, U.S. law permits the assessment of fees or restrictions on foreign services, among other actions,” the post said.
The U.S. is preparing an investigation under Section 301 of the Trade Act of 1974 that would allow the administration to impose trade remedies, including tariffs, according to a person familiar with the matter who requested anonymity to discuss internal efforts.
The USTR named several other European companies, including DHL Group, SAP SE, Amadeus IT Group SA, Capgemini SE, Publicis Groupe and Mistral AI, which it said have enjoyed unfettered access to the U.S. market for years.
At issue are policies governing digital commerce, as the EU moves to regulate U.S. tech giants, including Alphabet Inc.’s Google, Meta Platforms Inc. and Amazon.com Inc. Critics of the EU’s digital regulation say they are slowing down technological innovation, with global implications, and unfairly seeking to raise revenue.
The EU does not impose a digital services tax on revenue that technology companies generate from users in the bloc, and plans for a bloc-wide levy have repeatedly faltered amid opposition from tech-friendly member nations. However, several European countries have imposed their own.
France, for instance, imposed a 3% charge on revenue from targeted advertising and other digital services for some companies in 2019, with Italy, Austria, Spain and the U.K. following suit with their own levies.
A European Commission spokesperson said that the EU was an open and rules-based market where rules apply equally and fairly to all companies. The rules ensure a safe and level playing field and will continue to be enforced fairly, said the person who responded on the condition of anonymity, who added that EU officials would continue to engage with their U.S. counterpart on the joint trade statement they brokered earlier this year.
The threat from the USTR could heighten tensions between the U.S. and the EU amid faltering peace talks aimed at resolving the war in Ukraine. It also follows stiff criticism from President Donald Trump, who last week in a Politico interview called the bloc a “decaying” group of nations with “weak” leaders. A new U.S. national security strategy released this month also assails Europe over immigration and cultural issues and questions whether European countries would remain desirable NATO allies in the future.
Separately, Trump has imposed sweeping tariffs on imports — including 15% on many goods from the EU — to counter levies and other barriers he says unfairly limit the sale of U.S. products.
Trump administration officials have accused the EU of flouting the terms in its trade deal with the U.S., specifically the bloc’s commitment to “address unjustified digital trade barriers.”
Trump has also repeatedly criticized digital taxes as non-tariff trade barriers that harm American businesses — and he’s threatened “substantial” tariffs on countries that impose them. The U.S. president has already won some retreats, including Canada’s June decision to scrap a digital levy hours before it was scheduled to go into effect.
However, the EU has moved ahead with enforcement of its digital regulations, recently imposing fines worth hundreds of millions of dollars against Apple Inc., Meta and Elon Musk’s X social network.
The European Union has defended its approach, with trade chief Maros Sefcovic telling Bloomberg TV on Monday that the bloc is “going to protect our tech sovereignty.”
Sefcovic also said he’s in permanent contact with U.S. Trade Representative Jamieson Greer and U.S. Commerce Secretary Howard Lutnick.
Yet the USTR on Tuesday cast the EU as ignoring U.S. objections.
The bloc has persisted “in a continuing course of discriminatory and harassing lawsuits, taxes, fines, and directives against U.S. service providers” that “provide substantial free services to EU citizens and reliable enterprise services to EU companies,” while supporting millions of jobs and more than $100 billion in direct investment in Europe, it said. “The United States has raised concerns with the EU for years on these matters without meaningful engagement or basic acknowledgement of U.S. concerns.”
The so-called digital services taxes levied by European nations on U.S. companies have long been an irritant for U.S. policymakers. Congress considered targeting the measures with a provision in Trump’s signature tax cut legislation that would have imposed a “revenge tax” on countries the U.S. deemed “discriminatory.”
Treasury Secretary Scott Bessent led a push to remove that provision from the bill after securing an agreement among the Group of Seven nations to exempt U.S. companies from the global minimum tax. The deal was to include a “constructive dialogue on the taxation of the digital economy and on preserving the tax sovereignty of all countries,” according to a G-7 statement at the time.
The dispute over digital services taxes hangs over ongoing trade negotiations between the EU and the U.S., as Europeans seek new tariff exemptions, building on the bloc’s commitment to remove all duties on American industrial goods in exchange for a 15% levy on nearly all its exports.
The U.S. and the EU are also close to finalizing an agreement on separate treatment for U.S. firms under the global minimum tax framework, an area of cooperation between the trading partners.
The USTR on Tuesday said the risk of new fees and restrictions extends to “other countries that pursue an EU-style strategy in this area” — a potential warning for other nations contemplating similar policies.
