US warns EU of countermeasures over digital taxes targeting American firms

US threatens EU over tech taxes

The United States on Tuesday warned it could take countermeasures against the European Union over the bloc’s plans to tax American companies, highlighting major European firms as potential targets.

The EU, however, quickly responded, pledging to continue enforcing its tech regulations “without discrimination.”

In a social media post, the US Trade Representative’s (USTR) office criticised the EU and certain member states for their “continuing course of discriminatory and harassing lawsuits, taxes, fines, and directives” targeting American service providers.

The USTR cautioned that if the EU and its member nations proceed with measures that undermine the competitiveness of US firms, Washington “will have no choice but to begin using every tool at its disposal to counter these unreasonable measures.”

The post also indicated that major European companies could face retaliatory action, naming Accenture, DHL, Mistral, Siemens, and Spotify among those at risk.

“Should responsive measures be necessary, US law permits the assessment of fees or restrictions on foreign services, among other actions,” the USTR added.

It further noted that Washington would apply a similar strategy to any other countries that adopt an “EU-style strategy in this area.”

Thomas Regnier, a spokesman for the European Commission, however responded that "as we have made clear many times, our rules apply equally and fairly to all companies operating in the EU."

"We will continue to enforce our rules fairly, and without discrimination," he said.

The US statement also sparked pushback from Luther Lowe, head of public policy at startup accelerator Y Combinator.

Lowe called the move "a disappointing betrayal of 'little tech,'" adding that the EU's Digital Markets Act helps unlock market share for US firms.

President Donald Trump has previously lashed out at the European bloc over its regulation of US tech firms, and the USTR's statement marks a further attempt to put pressure on Brussels.

Trump threatened retaliatory tariffs in September after the bloc slapped Google with a $3.47 billion antitrust fine.

Earlier this month, the US leader also criticized a "nasty" $140 million fine by the EU against tech tycoon Elon Musk's X social network. He warned that "Europe has to be very careful."

Tensions will likely continue to simmer, with Google, Microsoft and Amazon recently facing further scrutiny by authorities in Brussels.

On Tuesday, the USTR post argued that American companies have provided "substantial free services" to EU citizens and "reliable enterprise services" to companies.

It also said that EU service providers, in turn, had been able to "operate freely" in the United States.

Trump's pushback against countries that he says are targeting US tech firms has prompted some changes elsewhere.

In June, Canada said it would rescind its digital services tax -- which would have hit US tech giants -- after Trump said he was ending trade talks with Ottawa.

(With AFP inputs)