Zero Hour for Trump’s Tariffs: Announcements Today – EU Examines Digital Service Taxes on US Tech Giants

With bated breath but not without plans for its own response, the EU awaits announcements regarding the imposition of ‘no exceptions’ tariffs today (2.4.25). The first collective processing of Trump’s tariffs against the EU, as well as Brussels’ response to them at the EU level, is expected on April 7-8, 2025, when the European Trade Ministers Council is scheduled, although the final response might require a few extra days (around mid-April) to be announced by Brussels. It’s still not entirely clear what new tariffs President Donald Trump will announce today, but one thing is certain: the U.S. president is irked that European companies sell significantly more goods in the U.S. than American companies do in the EU. Moreover, the tariffs Trump announces today will go into ‘immediate effect,’ according to White House representative Caroline Levitt. Key questions remain: What does Trump plan? Trump talks about reciprocal tariffs, meaning the U.S. will increase tariffs wherever they currently charge less than their trading partners. Additionally, he has mentioned examining other trade barriers such as strict import regulations or subsidies. In Brussels, the worst-case scenario is anticipated—that Trump could impose general additional tariffs of 20% or even 25% on all imports from Europe. Targeted tariffs on specific products would have less impact on the overall economy. Exports of EU pharmaceuticals, wood, copper, or semiconductors have been cited as potential targets, beyond automobiles. Trump has also pre-announced tariffs… 200% on alcoholic beverage imports from the EU. How will the EU respond? If the U.S. refuses to come to the negotiating table, the EU Commission intends to respond. A Brussels representative has said countermeasures with ‘maximum impact’ are being prepared. To make it harder for the U.S. President to perform specific calculations, the EU remains silent on the matter. Special tariffs suspended on U.S. products like gin, bourbon whiskey, motorcycles, and peanut butter will be reinstated mid-April as a response to the U.S. special tariffs on steel and aluminum imports already in place. Additional measures could affect many other U.S. products. The EU Commission argues that the U.S. sells more services to the EU than vice versa, mainly due to large American tech companies. Considering both goods and services, there is only a small surplus of 48 billion euros, according to the Commission, which corresponds to 3% of total trade between the U.S. and the EU. There are already calls from the European Parliament for action against American companies like Platform X owned by Elon Musk, Google, Amazon, and Netflix. For example, Bernd Lange (SPD), President of the Trade Committee in the European Parliament, considers imposing digital service taxes feasible. In a less severe scenario, Trump could quickly be persuaded to suspend the tariffs temporarily again—then start negotiations. In the worst-case scenario, a long trade war would follow—with serious consequences for the economy. Even in the case of negotiations, however, everything won’t return to how it was before. What could the EU offer the U.S. in negotiations? Besides tariff reductions on goods like American cars, new agreements are considered an option. According to the EU Commission, the EU and Trump could sign a new agreement to expand American liquefied natural gas (LNG) exports. Increased imports of military technology and agricultural products from the U.S. are also possible. What does this mean for the German economy? The U.S. is Germany’s most important trading partner, ahead of China and the Netherlands. In 2024, German companies delivered goods worth 161.4 billion euros to the U.S., accounting for ten percent of total exports. Conversely, in 2024, goods worth 91.4 billion euros were imported from the U.S. to Germany. German automakers already face significant burdens due to the announced special 25% tariffs. New U.S. tariffs also pose risks to the pharmaceutical industry. Nearly one-quarter of Germany’s pharmaceutical exports went to the U.S. in 2023. In percentage terms, this is even more than machinery (13%) and chemical industries (7.2%).