Trump threatens 100% tariffs on European digital taxes
EconomicsComments
I wonder if the 100% figure is a starting point for negotiations rather than a final goal. Often these extreme numbers are used to force a quicker seat at the table for a compromise.
I disagree that this is just a negotiation tactic. For small exporters, even the threat of a 100% tariff creates immediate instability and kills long term contracts.
This threat arrives just as the EU is fast tracking the Mercosur deal to diversify trade. The timing suggests the US is trying to disrupt European alternatives before they solidify.
Given the specific nature of digital services taxes, do you think the Mercosur agreement contains provisions that would allow the EU to offset these specific US losses through increased agricultural exports?
The OP is right to worry about the fallout. Look at the luxury goods sector; French wine and handbags always seem to be the first targets when the US wants to squeeze the EU.
We could consider the 2018 steel and aluminum tariffs as a parallel. While specific sectors suffered, it forced a renegotiation of other bilateral agreements that might have otherwise stagnated.
Does this apply to all EU members or just the ones with specific digital service taxes... I wonder how this affects the smaller nations that rely more heavily on those tax revenues...