Trump's trade war collides with EU's moves on Big Tech



Illustration: Aïda Amer/Axios
Tech's big bet on President Trump is far from bearing fruit, as his trade war reshapes global alliances.
Why it matters: Tech companies are banking on Trump to thwart regulations they think are unfair. But the EU is moving full steam ahead on enforcing its laws, and sees an opportunity to fill the vacuum that "America First" policies are creating.
- Tensions are ratcheting up, and the White House has cast a wide net on the types of regulatory actions from foreign governments that could spark more tariffs and retaliation.
Driving the news: The EU this week hit Meta and Apple with Digital Markets Act fines worth hundreds of millions of euros, which National Security Council spokesperson Brian Hughes said the U.S. would not tolerate.
- "Extraterritorial regulations that specifically target and undermine American companies, stifle innovation, and enable censorship will be recognized as barriers to trade and a direct threat to free civil society," Hughes said in a statement.
A U.S. Trade Representative official told Axios that "as the U.S. continues its national conversation on the digital economy, the EU has again raced ahead to set digital policy for the U.S. We strongly oppose these measures and reiterate our expectations for a fair and reciprocal level playing field."
State of play: The fines come amid the 90-day tariffs pause during which Trump and trading partners, including the EU, are meant to negotiate how to deescalate.
- EU officials have said issuing the fines during the pause wasn't a political calculation, but the tech companies impacted say otherwise.
- USTR posted a list of 10 "unfair digital trade practices" on X Thursday, highlighting digital service tax policies across the U.K., Europe, Asia and the Middle East.
Threat level: On top of the fines, the tech industry is poised to lose billions because of retaliatory tariffs, according to an Information Technology and Innovation Foundation study released this week.
- The most advanced U.S. tech exports, like chips and software, would suffer a $70 billion decline due to retaliation during the pause.
- Even with the exemption of 20 tech products, ITIF found exports would decline by $56 billion due to retaliation.
- The industry is bracing for additional national security-based tariffs on semiconductors.
What they're saying: "Trump's trade war is pushing our like-minded allies into the arms of China. The smart path forward is to work with the EU and others to make rules that prioritize democratic values and promote a level playing field for American businesses," said Rep. Suzan DelBene, Digital Trade Caucus co-chair.
- "I am confident that our European partners know China is not acting in good faith and is an unreliable partner," caucus co-chair Rep. Darin LaHood said.
- Center for European Policy Analysis' Reinhard Bütikofer: "If every European regulation, whatever the reasoning behind it, is being denounced as unfair taxes on Silicon Valley, that's not a basis for a conversation."
- Council on Foreign Relations' Zongyuan Zoe Liu: "It doesn't matter who is in the White House or how we deal with China, the Europeans are always going to regulate. The Trump uncertainty is only going to make them double down on that — using regulation to strengthen and protect the European market."
The big picture: The tariffs are having varying effects. While Italy reneges on its digital services taxes, France is threatening to tax and clamp down on Big Tech's data use.
- Policymakers and experts say Trump's tariff playbook could shift alliances away from the U.S. not just to the EU, but to China.