Financial Times: The EU may impose measures against major US IT companies

The EU is planning to hit Silicon Valley with retaliatory measures if Donald Trump follows through on threats to impose tariffs on the bloc, in the first use of a Brussels “bazooka” that could drag services into a trade war, the Financial Times writes.

The European Commission is looking to use its so-called “anti-coercion instrument” in a potential dispute with Washington, said two officials with knowledge of the plans, which would allow the EU to target US service industries such as Big Tech.

An official said “all options are on the table.” According to him, Trump’s threat to use tariffs to coerce Denmark to hand over Greenland and to press the EU to drop enforcement action against US technology companies would qualify.

EU trade ministers met on Tuesday in Warsaw to discuss his threats. Trade commissioner Maroš Šefčovič said he wanted to negotiate a way to avoid tariffs but added: “If we are hit, we will react firmly.”

Some member states are wary of fighting a trade war when economic growth is so weak.

Any retaliation would have to be proportionate, and the commission would have to provide evidence of damage to EU industries. It must also seek approval from at least 15 of the 27 member states. Consultations can take several weeks.

Laurent Saint-Martin, France’s trade minister, told the Financial Times that despite the ACI, the EU might need faster retaliatory measures. “Speed is one of the key issues; we have to be ready faster than last time. We have to be more united and faster.”

In March 2018 Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum. The EU took three months to approve its retaliatory measures on €2.8bn of US goods.

To remind, US President Donald Trump announced on Feb. 1 that he would impose tariffs on EU imports because Brussels treats Washington “terribly.”