Berlin Opposes EU Move to Tax US Big Tech as Trade Tensions Rise

Germany has openly rejected a French proposal to retaliate against U.S. tariffs by targeting American tech giants with new digital taxes, revealing ongoing divisions within the European Union over how to respond to Washington’s escalating trade measures.

According to EuroActiv, Germany’s opposition comes after the United States imposed sweeping tariffs on European exports — including a 10% blanket tariff on all EU goods and additional levies of 25% on steel, aluminum, and automobiles. The move, widely seen as part of a broader protectionist agenda by the U.S., has prompted calls for a coordinated EU response.

Last week, French official Sophie Primas indicated that Paris was prepared to push back against the U.S. by focusing on digital services — a sector dominated by American firms — as a key area for reciprocal tariffs. The proposal aimed to use the EU’s response to highlight concerns over the market dominance of U.S.-based tech corporations.

However, during a press conference in Brussels, Germany’s State Secretary for Finance, Jörg Kukies, made it clear that Berlin was not prepared to include digital services in any retaliatory measures, per EuroActiv. Kukies noted that while Germany remains committed to defending the EU’s interests, imposing taxes on American tech firms would not be part of its approach — especially in light of recent signals from Washington.

Related: EU to Proceed with Tech Fines Despite US Tariff Pause

Kukies referenced a decision by U.S. President Donald Trump to reduce tariffs on EU goods from an initial 20% down to 10%, suggesting that Berlin sees some room for de-escalation. Nevertheless, he cautioned that “all options remained on the table” should the U.S. reverse its position or introduce additional trade barriers in the future.

Germany’s reluctance to target the digital economy stems in part from the EU’s reliance on American technology infrastructure. As Kukies explained, the bloc currently lacks viable alternatives to U.S.-based services in key areas such as cloud computing, data centers, and artificial intelligence — a reality that complicates any attempt to penalize the sector without unintended consequences for European businesses.

The EU’s strategic disadvantage is underscored by its trade imbalance with the U.S. In 2023, the EU recorded a €108.6 billion deficit in services trade with the United States, a figure that reflects Europe’s dependency on American platforms and digital infrastructure, according to EuroActiv.

Source: EuroActiv