As the EU chats trade deals with the rest of the world, European Commission president Ursula von der Leyen has signalled Big Tech could be targeted if US negotiations fail.
In a week like no other for international trade, European Commission president Ursula von der Leyen has told the Financial Times that a tax on US Big Tech companies could be part of any response to US tariffs, should negotiations fail during the so called ’90-day pause’.
While markets halted any rally when the reality sank in that a pause to extra tariffs did not signal any level of certainty in international trade, the 90-day pause announced by the US and EU has given some solace to businesses around the world that a deal may be there to be done, particularly as Donald Trump’s ire appears to be more focused on China in recent days.
Meanwhile the rest of the world is looking to alternative markets. Yesterday (April 10), von der Leyen launched negotiations on a free trade deal with the United Arab Emirates (UAE) on a call with Sheikh Mohamed bin Zayed Al Nahyan, president of the UAE.
Here in Ireland, Niamh Smyth, Minister of State for Trade Promotion, Artificial Intelligence and Digital Transformation signed a Memorandum of Understanding with Dr Thani Al Zeyoudi, UAE’s Minister of State for Foreign Trade yesterday in Dubai, establishing a new Joint Economic Commission between Ireland and the UAE. These commissions present a forum for discussions on trade and economic issues. Bilateral trade between Ireland and the UAE currently has a value of some €8bn annually.
Again at EU level, a readout from a call between von der Leyen and Canadian prime minister Mark Carney yesterday signalled a growing closeness to Canada. She described the EU-Canada relationship as “a true success story, anchored by the Comprehensive Economic and Trade Agreement (CETA), which has led to a 66pc increase in bilateral goods trade since 2017”.
German newspaper Handelsblatt reported last night that an EU head of government is currently in China and that a détente may be on the cards as regards existing EU tariffs on Chinese electric vehicles (EVs).
As uncertainty regarding the reliability of the US as a trade partner persists worldwide, expect to see more of such negotiations taking place worldwide. In the meantime, should bilateral EU-US tariff discussions fail, von der Leyen has made clear that retaliatory plans are well underway, and Big Tech could be in the EU’s sights.
In the wide-ranging Financial Times interview, she re-emphasised that the EU wants a balanced agreement, but that if it was not forthcoming she could not rule out levies on US digital companies, including a tax on digital advertising revenues, which would hit the likes of Google and Meta, which have major operations here in Ireland.
Meanwhile, with Trump’s hands full on negotiating separate trade deals with numerous countries, and dealing with pushback from Wall St insiders, one can only hope that the mooted pharmaceuticals tariff might be put on the back burner for now.
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