EU Tech Regs Remain a Flash Point in US Trade Talks; White House Threatens Additional Tariffs

On Monday, citing “sources familiar with the matter,” Reuters reported the White House is considering placing additional tariffs on the EU or placing sanctions on member-state officials responsible for implementing the Digital Services Act. Trump himself later effectively confirmed the report in a Truth Social post.

“Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology,” the president wrote. “With this TRUTH, I put all Countries with Digital Taxes, Legislation, Rules, or Regulations, on notice that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A., and institute Export restrictions on our Highly Protected Technology and Chips.”

A spokesperson for the EU fired back in a news briefing Tuesday, per Politico Europe, stating “It is the sovereign right of the EU and its member states to regulate economic activities on our territory, which are consistent with our democratic values.”

Separately, a European Commission spokesperson responded specifically to Trump’s claim that the DSA and Digital Markets Act (DMA) are meant to harm U.S. technology companies. “The DSA does not look at the color of a company, at the jurisdiction of a company, nor the owner of a company,” he told Politico. “The DSA and the DMA both apply to all platforms and companies operating in the EU irrespective of their place of establishment.”

Related: EU Tech Regs Survive, For Now, in Trade Agreement With US

The DSA has been a particular hot-button issue for U.S. officials, claiming it places undue restrictions on free expression. In May, Secretary of State Marco Rubio threatened a visa ban on individuals, including foreign officials, involved in “censoring” Americans on social media and other digital platforms. Earlier this month, Reuters reported that the State Department had instructed U.S. diplomats in Europe to mount lobbying campaigns to build opposition to the DSA.

“Posts should focus efforts to build host government and other stakeholder support to repeal and/or amend the DSA or related EU or national laws restricting expression online,” the department said in a diplomatic cable.

It is unclear where the latest flare up leaves the ongoing trade discussions between the U.S. and EU. Last week’s joint statement outlining the framework agreement did not directly address the DSA, DMA, or other EU tech reg. Instead, it referred generally to a commitment to “address unjustified digital trade barriers,” and to “work together” to reduce non-tariff trade barriers.

Following the statement’s release, EU Commission said in a separate release, “We have made it very clear to the US that changes to our digital regulations – the Digital Markets Act and the Digital Services Act – were not on the table.”

They clearly remain on the U.S. menu, however. “As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies,” Trump said in his Truth Social post. “America, and American Technology Companies, are neither the ‘piggy bank’ [sic] nor the ‘doormat’ [sic] of the World any longer. Show respect to America and our amazing Tech Companies or, consider the consequences!”