The European Union (EU) said it would keep moving forward with its landmark digital rules despite US President Donald Trump threatening retaliatory tariffs against countries whose taxes or laws target US tech companies.
“It is the sovereign right of the EU and its member states to regulate economic activities on our territory which are consistent with our democratic values,” European Commission spokesperson Paula Pinho said in response to Mr Trump’s threat, issued via his Truth Social platform late on Monday.
“This is also why this was not part of our [trade] agreement with the US,” Pinho added.
Mr Trump threatened tariff and export controls on countries whose taxes, rules or laws on tech companies “discriminate” against the US.
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The threat came only days after Brussels and Washington outlined the full details of their transatlantic trade deal struck in Scotland in late July, in which the EU agreed to 15 per cent tariffs on most of its goods.
One EU official said the trade deal had “bought [the EU] some breathing space” but that Brussels had always expected other issues would require additional negotiations with Washington.
The official added that Brussels was adopting a strategy of remaining calm and not responding to all of Trump’s statements literally.
“It was obvious this would happen [on digital rules],” said an EU diplomat. “Concessions are seen by him [Trump] as a sign of weakness making him come back for more.”
The US had pressed for changes to the EU’s digital regulations as part of the trade talks, according to people involved. Washington especially took aim at the bloc’s landmark Digital Services Act (DSA), which forces big tech companies to police their platforms more aggressively.
But Brussels resisted the pressure from the US government, which believes the EU is unfairly targeting American companies and infringing freedom of speech principles championed by the Maga (Make America Great Again) movement.
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Ms Pinho stressed that trade and digital rules were “separate questions”. She said that the bloc would continue to implement the framework trade agreement.
The EU aimed this week to propose legislation to lower tariffs on US imports of industrial goods and some agri-food products to the bloc, she said. The US has pledged to reduce tariffs of 27.5 per cent on European cars to 15 per cent when it does so.
Mr Trump’s attack on digital rules and taxes also coincides with Brussels needing to decide on a number of investigations into American tech companies.
The EU has yet to decide on one of its investigations into Elon Musk’s X under the DSA. In preliminary findings last year, Brussels said X was in breach of the bloc’s regulations for deceptive design and insufficient access to data and transparency.
The EU also has to choose whether it wants to impose potential new fines on Apple and Facebook owner Meta under the Digital Markets Act, which is designed to curb tech giants’ dominance of the digital marketplace.
Apart from the European legislation, several EU member states, including France, Italy and Spain, have digital services taxes.
Trump’s renewed broadside against digital taxes also poses potential difficulties for the UK, which narrowly avoided cutting or scaling back its own digital services tax when it concluded its mini trade deal with Washington in May.
UK ambassador to Washington Lord Peter Mandelson has said he wants to conclude a tech deal with the US, which will focus on AI development.
If Trump does impose new sanctions or tariffs, the EU has options to retaliate, although it has so far been reluctant to deploy any of these out of fear of sparking a damaging trade war.
It has approved, but paused until February, levies on €93bn of annual US imports and could impose them swiftly.
Member states could also revive the idea of using the bloc’s “anti-coercion instrument” to hit Big Tech. This would allow Brussels to exclude US companies from public procurement contracts or ban royalty payments among other things.
France has already pressed for this as it is unhappy with the trade deal struck in Turnberry, Scotland. – Copyright The Financial Times Limited 2025
