Entrance to one of the Google buildings in the area of ”Docks Silicon” in Central Dublin, Ireland on Tuesday, November 29, 2022.
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The European Union claims that it maintains all open options if it does not negotiate the road from the American President of the US Donald Trump with a height of 20% of general tariffs – and this may include the passage of the powerful large technology.
Before the tariff announcement on Wednesday – what does it have Stunned global markets with him scope and scale – President of the European Commission Ursula von der Leyen said that in formulating its reaction Europe “has many cards, from trade to technology to the size of our market.”
“This force is also based on our readiness for solid remedies. All instruments are on the table,” said von der Leyen on Tuesday He repeated on Thursday.
As a block, the EU is the largest trading partner in the US between goods, services and investments, and trade between the IS pair roughly balanced when settling both goods and services.
But calculating the so -called “retaliation tariffs”, the US administration seems controversial he only looked at the commercial deficit of countries In goods from the USA, recognizing this gap as a “tariff” on the USA – and landing of the main exporters, such as Vietnam and Sri Lanka with the obligations of over 40%.
For the EU, this meant a 20% tariff due to the USA ' Goods deficit of around $ 235.6 billion. In recent months, Trump has adopted a special umbrage with US trade relations with a 27-day market, accusing this Treating the largest economy in the world “very bad” and making it very difficult to introduce (us) products to Europe “during sales.
One of the areas in which the EU is the main market for American companies is service and technology companies, said on Wednesday Holger Schmieding, chief economist at Berenberg.
“While the EU probably will not take revenge on significantly, it will probably threaten it if the negotiations have no result by the middle of the year,” he said. While the basic matter of the economist concerns about half of the additional American tariffs for the EU imports to negotiate until the end of the second quarter, technology companies are a way through which the EU can “hit the USA firmly,” said Schmieding.
Such funds can take the form of more severe provisions regarding large technology or the use of an instrument for counteracting a concert block (ACI) to delay issuing business licenses for American companies, limiting access to public contracts, limiting intellectual property rights or explicitly prohibit investment in the EU, according to Carsten Brezki, Global Head of Macro for research.
He said that specific goals may include applications, cell phones, cloud services and other areas, such as stored data.
With several national technological giants, Europe has a huge appetite for products and services such as AppleIN GoogleIN AmazonIN FinishIN MicrosoftIN Intel and LinkedIn. Many have a regional headquarters in the Irish capital of Dublin, originally attracted by her Low rate of corporate tax – Along with big names in the American industry of pharmaceutical and financial services.
The EU has already taken steps to break down large technology. Block Act on digital markets (DMA),
Last month, the European Commission – which is the EU executive body – Google Alphabet was calculated for a violation of DMA and issued Apple with guidelines The requirement for the iPhone manufacturer to do more to follow the law. Trump previously quoted EU regulatory activities against American technological giants as a reason to hit the block of tariffs. In February, he threatened the block with tariffs to solve “foreign forcing” American technology companies through digital taxes and fines.
Meanwhile, American technology giants will now be struggling with the rainfall of the supply chain from tariff policy Many of the assembly components and lines in Asia. Apple Actions have suffered the worst loss since 2020 on Thursday, which is over 9%, among the wide technological sales.
Dan Ives, a global head of technological research at the Wedbush Securities, said in the note at the beginning of this week that American technology is in the face of frozen budgets and levels of uncertainty from Covid, and cannot even give tips during the season of earnings in the first quarter.
It's a pity for European consumers
However, Brzeski from ING also noted that the introduction of remedies under ACI would require approval by 15 out of 27 EU members, the implementation would take about eight weeks and could meet other technical obstacles.
He also emphasized that after the Digital Service in the USA it will be a “nuclear option” in the EU trade policy set.
“Not only because it would be unprecedented, but also because it would probably cause strong retaliation in the USA, and also harm European clients, because the region currently has very small national alternatives for digital services in the US,” said CNBC.
“To some extent, the EU focused on digital services in the US would actually be a filthy image of what Trump has just announced: it would be a harmful measure of trading partners, but at the expense of domestic consumers.”
Andrew Kenningham, the main economist of Europe at Capital Economics, said in a Friday note that although EU decision -makers probably considered taxes on services or using ACI, eventually expected that the EU's answer would be “quite measured”.
“The EU will be aimed at minimizing escalation risk and maintaining remnants of trade relations in the US in the long run. Decision makers are also considered negotiations on defense and security,” he said.
“So while the EU leaders quickly criticized the tariffs, they also explained that they were open to negotiations.”
– Ryan Browne from CNBC contributed to this story.