Trump Announces Possible Increase in Customs Duties
The European Union (EU) and the United States (US) have recently found themselves at a crossroads in their tech relationship, with tensions rising over issues of trade and regulatory disagreements.
In a significant development, the US and EU signed a joint statement promising to enhance opportunities for technical cooperation. However, the détente was fleeting, as the most pressing issues in the trade relationship remained unresolved.
One of the key points of contention is Europe's approach to technology protectionism. The EU's playbook involves implementing broad regulations that appear universal but spare Europe when it cannot compete on the world stage. This approach has been criticised by experts, with Logan Kolas, the Director of Technology Policy at the American Consumer Institute, stating that settling on terms in ongoing trade negotiations would be in the best interest of all involved, as Europeans bear the brunt of their governments' protectionist decisions.
The European Digital Markets Act and the Digital Services Act, for instance, push a "big is bad" doctrine to punish American firms. The Digital Markets Act (DMA) defines as "gatekeepers" seven major companies that control key digital markets, five of which are American: Google, Amazon, Apple, Meta, and Microsoft.
In response to this, President Donald Trump announced on Truth Social that countries with digital taxes, legislation, rules, or regulations will face substantial additional tariffs from the United States. The Trump administration, rather than imposing additional tariffs immediately, should focus on technology protectionism in ongoing trade negotiations with Europe.
Meanwhile, the EU has shown signs of backtracking. It has already capitulated to lopsided tariff rates in the past. The EU Space Act, a legislative initiative aimed at harmonizing space activities across the Union, coins the term "giga-constellation" to subject any set of 1,000 or more operational spacecraft to special regulatory burdens. This approach allows Europe to pose as a rules-based regulator while clinging to exemptions at the World Trade Organization.
The EU's space ambitions are evident in its plans for the OneWeb and IRIS constellations. While OneWeb may "top out at under 1,000" satellites, Starlink, owned by SpaceX, already operates 8,000 satellites, and Amazon's Project Kuiper plans to launch more than 3,200 advanced low-earth orbit satellites.
The EU's tech regulations, while nonnegotiable in claims, have not been consistently upheld. As both sides navigate these complex issues, it remains to be seen how the tech landscape will evolve in the US-EU relationship.
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