This decision came simultaneously with Brussels advancing AI regulations and has ignited a full-scale trade war that could impact the global digital economy.
Trump’s 30% tax move on the EU
The European Commission’s recently announced new Artificial Intelligence Implementation Rules were presented as voluntary principles aimed at protecting public safety. However, these guidelines are based on the previously enacted EU Artificial Intelligence Law and require companies to sign up by August 2.
An intensive vetting process will reportedly be launched for companies that do not participate. While OpenAI has announced its acceptance of these rules, the CCIA lobby group, which represents major tech companies including Google and Meta, opposes them.
The Trump administration, however, has taken an openly hostile stance against Brussels’ regulations targeting American tech giants. Trump has characterized the EU’s hefty fines on tech companies as “foreign extortion,” while Treasury Secretary Scott Bessent has argued that these fines operate as indirect taxes.
Meta CEO Mark Zuckerberg, in a statement in January, directly targeted European regulators by declaring, “We will work with President Trump against governments that attack American companies.”
At the root of the problem lies Europe’s Digital Markets Act (DMA). This law, which came into effect in 2022, places giants like Apple, Google, Amazon, and Meta in a “gatekeeper” position, forcing various sanctions and operational changes.
Most recently, Meta was fined over $200 million for violating the DMA with its “take or pay” model. According to Reuters, Meta rejected the fine and will not propose any changes, indicating that new sanctions are on the way.
French President Emmanuel Macron emphasized that Europe must respond strongly to the 30% tariffs imposed by the Trump administration. Macron stated that the European Commission should deploy all available tools and that the “anti-coercion tool” is also on the table.
This tool allows sanctions to be imposed not only on physical goods but also on digital services. If the US is deemed to be exercising economic coercion, restrictions on the digital services of companies like Apple, Google, and Meta in Europe could be considered.
The European Commission’s Director of Digital Competition, Henna Virkkunen, stated that the regulations would be non-negotiable. However, the EU’s removal of a new tax proposal for digital companies from the budget was interpreted as a partial retreat by the Trump administration.
However, this digital war between the two sides is not merely an economic struggle. The two sides are facing off to determine the future of the internet and who will govern technology and under what rules. The billion-dollar tech giants appear to have no choice but to be caught in the middle of this conflict.
