Trade negotiations between the US and the EU have reportedly hit a significant snag – over the way major US tech companies are treated by Brussels, in terms of the amount of money the bloc is able to collect from them.
The New York Post reported, citing a Trump administration source, that the talks are currently stalled, as the EU is attempting to maintain the high levels of various taxes, but also fines.
In late April, the EU Commission announced that it found Apple and Meta had violated the Digital Markets Act (DMA) and were ordered to pay €500 million ($570 million) and €200 million ($225 million), respectively.
But these figures are low compared to some previous fines – the biggest being the $4.5 billion one against Google in 2018. This then led the Post to speculate that the amount of the latest fines could have been the EU’s way of offering “an olive branch” in the context of trade issues with the US.
Yet developments this week in Washington, where the trade talks are being held, indicate that the White House wants the policy of handing down huge fines to US tech giants to be reversed.
On the taxation front, EU member countries like Italy, France, and Spain take about 3 percent in digital sales taxes from companies whose global turnover is higher than $853 million.
Both sides have accused each other of protectionism, with US Secretary of the Treasury Scott Bessent this week accusing the EU of turning fines into a form of a tariff.
There are voices in the European Parliament (EP) who agree, with Danish MEP Anders Visitien describing the fines as “a blatant EU attempt at a cash grab.”
When the recent fines against Apple and Meta were announced, the US administration blasted the decision as an act of “extortion” – but the EU’s still trying to stand its ground, by separating the issue from others in the trade talks.
One unnamed EU diplomat quoted by the Post even linked “digital standards” with those applying to food and health – i.e., as non-negotiable.
Neither side appears ready to blink, with anonymous US Treasury sources choosing not to put too fine a point on it.
Trump is willing to walk away without a deal,” one said.
