The European Union is prepared to significantly escalate its trade dispute with the United States, potentially imposing levies on major US digital companies like Meta, Google, and Facebook if negotiations with Donald Trump fail to resolve his ongoing tariff war against Europe. European Commission President Ursula von der Leyen issued a stark warning in an interview with the Financial Times, stating that the EU is developing retaliatory measures, including a possible tax on digital advertising revenues, targeting the services sector.
Von der Leyen's comments come as the EU grants a 90-day pause on its planned retaliation against recent US steel and aluminum tariffs, imposed last month by the Trump administration. These initial countermeasures would have affected approximately €21 billion of US imports. The Commission president emphasized the EU's desire for a "completely balanced" agreement with Washington during this negotiation window.
However, she made it clear that the EU is ready to deploy its most powerful trade tools, including the bloc’s anti-coercion instrument, which has the power to target services exports. Von der Leyen explicitly mentioned a levy on the advertising revenues of digital services as a potential measure if talks fail. This would represent a tariff applied across the entire EU single market, differing from existing digital sales taxes implemented individually by member states.
EU chief to Donald Trump: There are no winners in this, only losers
Von Der Leyen described Trump's trade war as a "complete inflection point in global trade" and a "turning point with the United States," asserting that a return to the previous status quo is no longer possible. She cautioned that "there are no winners in this, only losers," highlighting the current turmoil in stock and bond markets as the "cost of chaos" and uncertainty.
While open to discussing the alignment of EU and US product standards, Von Der Leyen downplayed expectations for significant progress in this area, citing fundamental differences in lifestyle and culture. Crucially, she ruled out any negotiation on the EU's digital content and market power regulations, which are viewed by the Trump administration as de facto taxes on US Big Tech firms. Similarly, she stated that the EU's value-added tax (VAT) is a sovereign decision and not subject to negotiation.
EU chief accepts: WTO has failed
Von der Leyen acknowledged the shared concerns of both the EU and the US regarding the failures of the World Trade Organization (WTO) to ensure a level playing field, particularly concerning Chinese industrial subsidies. She stated that the current crisis has spurred discussions on the need to "modernise, reform and stabilise the WTO," emphasizing that reform, rather than simply preserving the existing system, is essential.
Von der Leyen's comments come as the EU grants a 90-day pause on its planned retaliation against recent US steel and aluminum tariffs, imposed last month by the Trump administration. These initial countermeasures would have affected approximately €21 billion of US imports. The Commission president emphasized the EU's desire for a "completely balanced" agreement with Washington during this negotiation window.
However, she made it clear that the EU is ready to deploy its most powerful trade tools, including the bloc’s anti-coercion instrument, which has the power to target services exports. Von der Leyen explicitly mentioned a levy on the advertising revenues of digital services as a potential measure if talks fail. This would represent a tariff applied across the entire EU single market, differing from existing digital sales taxes implemented individually by member states.
EU chief to Donald Trump: There are no winners in this, only losers
Von Der Leyen described Trump's trade war as a "complete inflection point in global trade" and a "turning point with the United States," asserting that a return to the previous status quo is no longer possible. She cautioned that "there are no winners in this, only losers," highlighting the current turmoil in stock and bond markets as the "cost of chaos" and uncertainty.
While open to discussing the alignment of EU and US product standards, Von Der Leyen downplayed expectations for significant progress in this area, citing fundamental differences in lifestyle and culture. Crucially, she ruled out any negotiation on the EU's digital content and market power regulations, which are viewed by the Trump administration as de facto taxes on US Big Tech firms. Similarly, she stated that the EU's value-added tax (VAT) is a sovereign decision and not subject to negotiation.
EU chief accepts: WTO has failed
Von der Leyen acknowledged the shared concerns of both the EU and the US regarding the failures of the World Trade Organization (WTO) to ensure a level playing field, particularly concerning Chinese industrial subsidies. She stated that the current crisis has spurred discussions on the need to "modernise, reform and stabilise the WTO," emphasizing that reform, rather than simply preserving the existing system, is essential.
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