A possible retaliation by the EU could be to not enforce US intellectual property rights in the EU anymore. Or we could start taxing cloud companies, who, until now, have not paid taxes in the EU for profits that they generate in the EU.
This is exactly what I was thinking. Is not the US export far higher than import if they take into account the software and other IT services they sell?
I would expect other countires to tarrif that.
That would work of we had viable alternatives (on par with the US offers or as an easy migration). But we don’t really, so if the EU also adds tariffs than we’ll have the same issues the US is going to have. Meaning higher prices for the same offer since we’ll have no other choice but to stick with the US IT offer.
Like other comments said, this could work only if this was long term and everybody bites the bullet until they have a good local alternative to foreign offers with high tariffs. And the chances of having a lower offer as the one you were importing are really high. So, everybody is betting on short term.
Higher Prices? What is the "Price" of Instagram and Google Maps? But on the other hand, how would you put tariffs on these?
The good thing is: If the EU finds a way to tax the money flowing from advertisers to big tech, consumers would not be affected (at least not financially), because they are not the ones paying the price.
Yes. So advertising gets more expensive when targeting EU users. The users don't care, so there wouldn't be much public backlash. And the advertisers will either cut back / relocate their ad spendings or raise their marketing budget.
I don't think the current US administration understand the EU.
There are some things where I have my doubts about the current actions of the European countries, like rearmament. Will that be dropped the minute a new US administration enters? What the EU does well, like really well, is trade and bureaucracy. It is, in my mind one of the few areas where the EU can absolutely run circles around the US, while managing to protect and isolate itself from the worst fallout. We've already seen this with the current EU tariffs, they are extremely precise and targets Republican votes at almost no cost to EU consumers. I think that will continue, rather than imposing broad tariffs, the EU will target things Trump care about specifically.
I have a pet theory on why that is. In EU to become a Brussels career bureaucrat you need to be able to speak a couple of languages fluently. This serves as a kind of a filter. Whatever they are, dumb they most certainly are not. To a lesser extent this applies to European politicians too.
Bureaucrat yes, politicians no. Every eu law is translated in to every language of the union and EU employees an army of interpreters that translate in real time sessions of EU parliament- you can be an EU politician only knowing your mother tongue.
Expense spent on these translation services has a side benef though- you have a large volume of publicly accessible multilingual text which came in handy for training machine translation (eg deepl) even on smaller languages.
That’s why I said “to a lesser extent”. It’s _possible_ to survive as a high level EU country politician without being fluent in a second language, but it’s definitely suboptimal. So it still serves as a forcing function.
The thing is, you need to take into account the fact that a lot of the political "deals" are not done during official EU sittings, when these translation services are available.
A lot of the discussions happen during the informal after-hours in cafes and restaurants.
This is one of the reasons why, for many years, the Dutch delegation was very unsuccessful at pushing their own interests and placing their representatives in "important" positions, as they were all keen on taking the first train home from Brussels, and were skipping these informal gatherings.
It's not a stretch to imagine that a poor mastering of the "important" EU languages will put a politician at a disadvantage in such settings, due to an inability to communicate with his/her peers.
Why not? Multiple politicians have already mentioned IP as a possible method of retaliation. Also, the goal is to hurt Trump, his voters and his allies. Tech Bro's are Trumps allies nowadays.
Denmarks largest export is Ozempic. Ignoring IP rules will hurt EU producers too.
How do you plan to ignore IP to hurt American tech companies. I guess if you allow piracy of all of netflixs content that would work (but same thing would hurt spotify).
Most tech companies are not protected by IP but by network effects and vendor lock in. It would be far simpler to simply implement a minimum tax on revenue or advertising spend in country to extract value.
Another possible retaliation is countries stop exports of particular products to the US. China has already done this with rare earth based materials. Asian countries could decide not to allow the US to buy specific small popular microcontrollers. This can be worked around, but it takes time to lay out a new PCB, port the firmware, and test it all, and that costs money.
