Size matters when it comes to tariff threats

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Another day, another tariff. Last week, President Donald Trump created more of the sort of chaos he loves by throwing down the tariff gauntlet again to dozens of nations. Some of it was about trying to make sure forced labour is being taken out of the supply chains of nations sending goods to the US. Some of it was about using antiquated rules to punish countries — like Canada — that just seem to annoy him. But some of it was about longstanding fights between US companies and overseas regulators, particularly around technology. Trump said last Friday that he would hit the EU with more tariffs and begin new tariff probes given that Europeans are taxing US tech companies.

On July 21, a group of US congress people wrote to Trump praising his tariff threats on European nations that impose a digital services tax, claiming this and other EU tech regulation hurts US companies. Two days later, US Trade Representative Jamieson Greer issued the following statement: “Today, the European Commission announced that it will fine Google nearly $1bn, the latest in an increasingly aggressive approach targeting US technology firms. This is in addition to two recent actions by the Commission under the Digital Markets Act that target Google’s Android operating system and Search services that pose serious risks for the privacy and security of users, represent a de facto forced technology transfer and intellectual property theft, and impose unreasonable financial penalties.”

Greer went on to add that the “EU often claims that it is looking for stability and predictability in our trading relationship, but these actions are driving massive uncertainty for US exports of goods and services to Europe. We are trying to resolve our concerns with the EU’s…