EU President von der Leyen Issues Warning on Tariffs Amid US Trade Negotiations
As negotiations commence, potential tariffs on US tech companies loom if talks reach an impasse.
Brussels – The European Commission President Ursula von der Leyen has issued a stark warning regarding the upcoming trade negotiations with the United States, underscoring a three-month timeframe to reach an agreement and avert escalating economic tensions.
Following a shift in the US stance on tariffs, new discussions between Brussels and Washington are set to begin.
Von der Leyen cautioned that if negotiations do not yield satisfactory results, the European Union could target major US tech companies, indicating readiness to impose taxes on digital advertising revenues from companies including Meta, Google, and X.
In an interview, von der Leyen emphasized that failure to resolve trade issues could lead to renewed economic conflict, stating that the EU possesses a range of countermeasures under the anti-coercion tool, effective since December 2023. This mechanism allows EU member states to respond to perceived trade threats from external entities with various measures, including tariffs and restrictions on trade in services, intellectual property rights, foreign direct investment, and government procurement.
The European Commission's strategy indicates a measured response aimed primarily at balancing trade practices and reinforcing economic cooperation with the US, which has historically been a key ally.
Von der Leyen articulated that the goal is to establish a 'fully balanced' agreement within the 90-day negotiation window, reiterating that trade disputes yield no winners, only losses.
Brussels has identified vulnerabilities in the US approach to trade, particularly relating to the services sector, where the EU faces a substantial deficit.
While the EU reported a goods trade surplus with the US of €157 billion in 2023, it recorded a service trade deficit of €109 billion.
This disparity reflects the dominance of US companies in the European service market, where it is reported that 80 percent of services originate from the US.
In light of these figures, von der Leyen underscored the importance of securing a beneficial negotiated solution.
She indicated that the EU may consider implementing a digital services tax applicable across the single market to facilitate negotiations.
However, she has ruled out any concessions regarding existing regulations, particularly those deemed 'untouchable,' such as those governing the digital services landscape.
Additionally, von der Leyen clarified that discussions on VAT are off the table, framing them as sovereign matters.
As negotiations commence, uncertainty prevails regarding potential outcomes given the unpredictable nature of the US political landscape.
Von der Leyen's statements signal a strategic positioning by the EU as talks progress.
Following a shift in the US stance on tariffs, new discussions between Brussels and Washington are set to begin.
Von der Leyen cautioned that if negotiations do not yield satisfactory results, the European Union could target major US tech companies, indicating readiness to impose taxes on digital advertising revenues from companies including Meta, Google, and X.
In an interview, von der Leyen emphasized that failure to resolve trade issues could lead to renewed economic conflict, stating that the EU possesses a range of countermeasures under the anti-coercion tool, effective since December 2023. This mechanism allows EU member states to respond to perceived trade threats from external entities with various measures, including tariffs and restrictions on trade in services, intellectual property rights, foreign direct investment, and government procurement.
The European Commission's strategy indicates a measured response aimed primarily at balancing trade practices and reinforcing economic cooperation with the US, which has historically been a key ally.
Von der Leyen articulated that the goal is to establish a 'fully balanced' agreement within the 90-day negotiation window, reiterating that trade disputes yield no winners, only losses.
Brussels has identified vulnerabilities in the US approach to trade, particularly relating to the services sector, where the EU faces a substantial deficit.
While the EU reported a goods trade surplus with the US of €157 billion in 2023, it recorded a service trade deficit of €109 billion.
This disparity reflects the dominance of US companies in the European service market, where it is reported that 80 percent of services originate from the US.
In light of these figures, von der Leyen underscored the importance of securing a beneficial negotiated solution.
She indicated that the EU may consider implementing a digital services tax applicable across the single market to facilitate negotiations.
However, she has ruled out any concessions regarding existing regulations, particularly those deemed 'untouchable,' such as those governing the digital services landscape.
Additionally, von der Leyen clarified that discussions on VAT are off the table, framing them as sovereign matters.
As negotiations commence, uncertainty prevails regarding potential outcomes given the unpredictable nature of the US political landscape.
Von der Leyen's statements signal a strategic positioning by the EU as talks progress.
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