EU may target US tech giants in tariff response

By putting services in scope, €18 trillion trade bloc looks to focus tech sector minds

World War Fee Speaking ahead of today's extraordinary meeting of the European Union's trade ministers, a spokesperson for the French government was clear that the trading bloc's response to blanket tariffs on goods could include services, bringing US tech giants within its scope.

Sophie Primas told the media late last week that the response to the sweeping US tariffs on EU goods of 20 percent would hit digital services.

Over the course of Thursday and Friday, the US stock exchanges lost over $5 trillion, and today, markets in Asia are showing more losses

The EU responded to US tariffs on aluminum and steel last month. But the blanket tariffs announced by US President Donald Trump last week – which have wiped trillion of dollars off global stock market valuations – would require another response.

"The second response will cover all products, and I want to stress this – services will be included," Primas said. She added that "digital services," including those provided by Google, Amazon, Facebook, Apple, Microsoft would be in scope.

While Trump's tariffs represent one of the biggest shocks to global trade in the last 50 years, they have so far excluded services – such as software – and semiconductors. But tech products from Asia have been targeted in the sweeping new policy. Apple, for example, outsources production to the region and was hit particularly hard in the market rout. It now faces the prospect of raising prices in the US.

Speaking before he entered an extraordinary meeting of the EU's trade ministers, Michał Baranowski, Polish undersecretary of state at the Ministry of Economic Development and Technology, said they were deciding how the bloc would respond to the "so-called reciprocal tariffs."

"It's very clear that there will be no winners in this confrontation. In fact, over the course of Thursday and Friday, the US stock exchanges lost over $5 trillion, and today, markets in Asia are showing more losses. It's very much hurting Americans, but it's also hurting Europeans and other countries around the globe. This will be the main point of our discussion."

Ex-Microsoft CEO Steve Ballmer was downbeat over the weekend's "Microsoft at 50" celebrations when reflecting on the impact of tariffs, saying: "As a Microsoft shareholder, this kind of thing is not good."

The fact that Microsoft primarily sells software and services rather than hardware did not shield it from losing $165 billion in market value last week. Speaking about the tariffs, Microsoft co-founder Bill Gates reportedly said: "So far, it's just on goods, but you know, will it eventually be on services? Who knows?"

Baranowski said the goal of Europe's meeting of trade ministers is to "preserve unity and give clear direction to the European Commission on their negotiations with the United States."

Ahead of the meeting, he said: "So far, the approach that we have seen has been too much 'shoot first, talk later.' I hope that we can switch to negotiations as soon as possible. What matters the most for millions of jobs in Europe, in the United States, is how we trade, how we invest together, both trading in goods as well as services."

The ministers will hold a press conference later today announcing their upcoming moves. ®