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The current situation regarding tariffs is fluctuating, to say the least. There are concerns over future action, despite the recent news of a 90-day pause on non-retaliatory entities and a reduction of tariffs set on entities like the EU. These concerns come from the fact that the European Commission is planning retaliatory measures should talks fail, including a possible tax on digital advertising revenues.
In response, Germany is pushing for caution on such a move. As reported by the Financial Times, German finance minister Jörg Kukies stated: "There are products where the ability to substitute from other services and other goods from other regions of the world is easy, and there are sectors where it is more difficult."
Kukies followed this, saying, "We just have to be nuanced and differentiated."
The Digital Specter Looms
A possible tax on digital advertising has been mooted in several countries, with French finance minister Eric Lombard telling the FT: "We have said everything is on the table. Among the set of measures that we could take, there could be measures that concern the digital industry. It is one of the elements on the table."
Understandably, countries like Ireland and Luxembourg, which host many US tech companies, are reticent. Furthermore, reports indicate that countries like the UK are considering reducing taxes on digital services as an offer to the White House to generate goodwill or lower tariffs. Other countries are remaining quiet about possible retaliatory action, waiting until the proposals from the European Commission are released, allowing for an informed debate.
Elon Musk, a close advisor to Donald Trump and the owner of X, is undoubtedly familiar with the European Union and the European Commission and potential moves against high-profile digital corporations. In 2023, the commission opened formal proceedings against X under the Digital Services Act, and only recently did the commission ask the company to hand over internal documents about its algorithms as it investigates possible breaches around content moderation.
Considering his political position within the United States, the commission has deepened the investigation following Musk's repeated attacks on European governments, particularly what could be perceived as interference in foreign elections.
Dictating Future Trade and Tariffs
With President Trump stating his pause and reductions on tariffs are for "a short period of time" and the EU having been reduced from 20% to 10%, any action from the EU could be seen as aggressive and result in an increase to 20%, or as seen in the case of China, as high as 125%.
Germany and other countries within the European Union will be keen to prevent a full-blown trade war, particularly given the ramifications for local businesses and international stock markets.
About the author: Chris Wray has been writing at Wccftech gaming section since 2015 and is an opinionated bloke from the north of the UK (think Ned Stark). He enjoys video games, films, books, beer, whisky and other alcohol. He also supports Manchester Utd and for some reason he writes profile pages in the third person. His expertise is in gaming and the games industry, primarily on the PC. In addition to this, he works with and contributes to the finance and tech sections.
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