From Whiskey To American Tech Giants, Europe Is Ready To Bring More 'Heat' On Tariffs

Besides harley-davidson motorcycles and bourbon whiskey, the EU is reportedly considering putting tariffs on more American products to counter the Trump administration's impending "reciprocal tariffs."

The U.S. has already implemented tariffs on steel and aluminum, with reciprocal tariffs set to take effect on April 2, followed by additional tariffs on automobiles starting April 3. The EU has responded with similar retaliatory tariffs on American motorcycles and alcoholic beverages.

Ask Aime: What is the EU's plan to counteract the U.S. tariffs on Harley-Davidson motorcycles and bourbon whiskey?

However, the whole situation seems to get worse after Trump claimed that he would escalate punitive measures if the EU proceeded with its plan to impose counter-tariffs on certain U.S. goods, and accused the EU of extorting American companies through its tech regulations and threatened to impose additional tariffs on the bloc.

Now, the EU is reportedly preparing to intensify its countermeasures, potentially targeting U.S. financial services firms such as jpmorgan chase and bank of america, as well as tech giants like Elon Musk's social platform X, search engine google, and online retailer Amazon.

In mid-March, a senior EU official told the media, "We will approach these negotiations from a position of strength. Europe holds a lot of cards. From trade to technology to the size of our market. But this strength is also built on our readiness to take firm countermeasures. All instruments are on the table."

Shortly before publication, European Commission President Ursula von der Leyen stated during a plenary session of the European Parliament that the EU is capable of resisting U.S. trade tariffs, emphasizing that all tools are under consideration.

According to EU data, in 2023, the bloc had a €156.6 billion trade surplus in goods with the U.S. but a €108.6 billion trade deficit in services, providing it with some leverage in the dispute.

Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations, noted, "America's tech giants, financial industry, and pharma companies have deep roots in Europe. Push too far, and Brussels could tighten the screws: digital levies on Silicon Valley, regulatory clamps on Wall Street, or taxes on U.S. pharma exports."

Gehrke added, "America may wield the bigger stick, but Europe has plenty of sharp stones to throw."

The report outlines two primary approaches the EU might take to counter U.S. services: One is leveraging regulations enacted over the past five years to tighten oversight of major tech companies, impose taxes on large U.S. banks, or slow down approval processes for American businesses operating in the EU.

The other is imposing taxes on financial transactions and digital services, raising landing fees for U.S. airlines at European airports, or using the International Procurement Instrument to exclude U.S. firms from EU public tenders.

Yves Melin, a partner at law firm Cassidy Levy Kent, remarked, "When you see the positioning of the big American tech companies over the last few months, who are all close to Trump, you get the impression that they're lobbying the White House against Europe. In fact, they're extremely vulnerable to retaliatory measures."

A great example is the EU's Digital Markets Act (DMA), which aims to curb the monopolistic power of tech giants and maintain market competition. The European Commission could decide as early as this week whether Apple and Meta have violated the regulation.

As a last resort, the EU could activate its Anti-Coercion Instrument (ACI), which allows for broad retaliatory measures, including restrictions on services. If Brussels deems U.S. actions overly aggressive, the tool could be deployed for countermeasures.

Melin noted, "I wouldn't be surprised if the first victims are the American tech industry,"

EU senior officials have indicated that while such measures are feasible in principle, many member states oppose using the ACI to escalate the conflict. Activating the instrument requires support from at least 15 of the EU's 27 member states.

European businesses have also expressed caution about potential escalation. Luisa Santos, deputy director-general of BusinessEurope, said, "The problem with all these ideas of leverage is that they are not really leverage."

In reality, the EU still hopes to negotiate with the U.S. The European Commissioner for Trade and Economic Security, is seeking to establish a terms sheet with Washington to frame future talks.

Potential negotiations could involve reducing tariffs, increasing EU investment in U.S. defense companies, boosting purchases of American liquefied natural gas, or making compromises on certain regulatory issues.

A senior official from an EU member state remarked, "We don't want to cross from trade to security. They probably don't want to cross from trade to technology, right? I mean, if we are fighting, let's have at least a clear box."