The EU tech tax on US tech giants is back in the spotlight as relations between Brussels and Washington heat up. The European Union has threatened to impose targeted digital taxes on digital giants such as Meta and Google if trade negotiations with the Trump administration break down.
Though both sides signed off on a 90-day tariff truce—after Trump’s abrupt about-face on tariffs—the EU indicates it’s prepared to strike back if talks break down. This time, though, the battle isn’t about soybeans or steel but dominance of the digital economy.
EU Commission President Ursula von der Leyen has called for tariffs on digital ad revenues and stricter enforcement of digital market rules. The US, for its part, accuses these measures of being veiled protectionism against American companies.
Even under pressure, Brussels maintains its digital regulations are not up for negotiation. As the clock starts ticking on fresh tariffs, the EU’s warning signal marks a change in trade war tactics—with Big Tech now at the center of an impending transatlantic showdown.
EU Bides Its Time, But Lines Up the Gun
European Commission President Ursula von der Leyen stated that the bloc will bide 90 days before triggering new tariffs. Yet she was explicit: if negotiations break down, the EU will target US tech firms. A likely option involves taxing their European ad revenues. “We wish for a balanced result,” she said to Financial Times. “If not, our retaliatory measures will be triggered.”
Trump Tariffs Trigger Digital Strategy
The threat follows Trump’s unexpected flip-flop. He initially declared steep tariffs on EU products, then suspended them. The EU retaliated by withholding its own scheduled duties—valued at €20 billion on products such as motorcycles, soybeans, and cosmetics. But this time, it’s not only about products. The EU wishes to strike where it hurts: tech supremacy.
Digital Rules Remain Unscathed
The EU is being asked by the US to unwind digital rules. But Brussels is not moving. Regulations such as the Digital Services Act and Digital Markets Act will remain intact. Von der Leyen indicated the EU will not go back on what she referred to as “untouchable” digital legislation. Trump officials consider these regulations to be hidden taxes on American technology.
The fight is now not just about tariffs. It’s about who dominates the digital economy. EU trade chief Maros Sefcovic has been negotiating with senior US officials. But the warning is clear—if negotiations hit a roadblock, Europe will levy tax on tech.
With Big Tech now being at the eye of trade tensions, the EU digital tax on US big tech firms may be the next hotspot in an escalating world economic confrontation.
