Brussels may impose higher taxes on American technology and digital services giants if negotiations do not bring an end to the trade war declared by US President Donald Trump, European Commission President Ursula von der Leyen warned in an interview with the Financial Times newspaper published on Thursday.
After the American President imposed customs duties on steel, aluminum, vehicles (25%) and even on most products imported into his country from the European Union (10%), Brussels insists that it is seeking a mutually beneficial and "absolutely balanced" agreement with Washington.
But Ursula von der Leyen simultaneously seemed ready to take it to a new level, suggesting that retaliation could target American digital services companies if negotiations failed.
“There is a wide range of countermeasures,” he explained. “For example, taxes could be imposed on advertising revenue from digital services.”
He referred to the use of the "mechanism to prevent coercive measures", a weapon that the press has dubbed a "bazooka" and is presented as a deterrent tool to be activated when diplomatic efforts prove to be a dead end.
This mechanism provides in particular for the freezing of access to European markets and the blocking of certain investments.
The US Government complains about non-tariff barriers, which, according to it, unfairly hinder American exports to the Old Continent.
Washington criticizes above all the Value Added Tax (VAT), but also the strict rules in the EU regarding technology, especially for competition and for controlling the content posted.
For Ms von der Leyen, European law on technologies is "inviolable".
The President of the Commission also rejected in advance any negotiation on VAT, which applies without exception to national and imported products.
Ursula von der Leyen announced earlier yesterday that the EU would suspend the implementation of additional tariffs planned for certain American products, "to give negotiations a chance", following Donald Trump's change of heart the day before yesterday Wednesday regarding the new, huge tariffs he announced, except for China.
The US President suspended additional 90% tariffs on products imported from Europe for 20 days. However, he maintained 25% tariffs on steel, aluminum and cars, as well as the "base" tariffs of 10% on all other products during this suspension.
"Tariffs are taxes that only harm businesses and consumers. That's why I have always advocated for a zero-tariff agreement between the EU and the US," Ms von der Leyen said on Wednesday.
In her interview with the FT, the head of the European Commission stressed that the trade war is sparking discussions on how to "modernize, reform and stabilize" the World Trade Organization (WTO), as "a good crisis should never go to waste."
Source: KYPE
