The European Union is preparing to take US head on in the growing global tariff war. The EU is looking to impose bloc-wide tariffs on major US tech companies, such as Meta and Google, if negotiations with Washington fail to be resolved, European Commission President Ursula von der Leyen has warned.
Although taking to social media US President Donald Trump made the decision to pause further tariff hikes for 90 days, while the EU exports to America will still face a “baseline” 10% import duty instead of the planned 20% under his new trade regime. Nevertheless, the European Commission has announced it would temporarily suspend its countermeasures, pending further negotiations.
Von der Leyen confirmed that the EU would pause its planned retaliation against US steel and aluminum tariffs during the negotiations but stressed that Brussels would not negotiate over its “untouchable” rules on digital content, market power, and other “sovereign decisions.” The bloc also will not negotiate its value-added tax (VAT), which US officials – including Trump – have lambasted as “discriminatory” against American exporters, even though both imported and locally produced goods are taxed equally.
Speaking to the Financial Times on Thursday, von der Leyen said Brussels was ready to deploy its most powerful trade measures, potentially targeting American digital service providers and the advertising revenues of Silicon Valley giants. “We are developing retaliatory measures,” von der Leyen said, adding that these could include the first use of the EU’s anti-coercion mechanism to hit services rather than goods. “There’s a wide range of countermeasures… in case the negotiations are not satisfactory. An example is you could put a levy on the advertising revenues of digital services,” she added, outlining a measure that would apply across the bloc’s entire single market – on top of digital sales taxes set individually by member states.
While the EU remains committed to seeking a “completely balanced” agreement during Trump’s 90-day tariff freeze, von der Leyen made clear that Brussels would not hesitate to act if talks fail. The EU is also considering tariffs on US scrap metal exports, as well as protective measures to prevent Chinese goods – targeted by prohibitive 145% US tariffs – from flooding European markets.
Von der Leyen has described Trump’s tariff war as a “turning point” for global trade, saying there would be no return to the “status quo” between the EU and the US. She claimed that Brussels had attempted to negotiate with Washington in recent months but was told to wait until Trump’s April 2 announcement, which imposed a 20% “reciprocal” tariff on the EU.
“There are no winners in this, only losers,” she said. “Today we see the cost of chaos… the costs of the uncertainty that we are experiencing today will be heavy.” While both sides have agreed that reform of the World Trade Organization (WTO) is needed, von der Leyen warned that the economic chaos unleashed by Trump’s tariffs was already inflicting heavy costs on global markets which may in turn bring long term repercussions on the economies world over and especially the European market.
