EU defends digital taxes after Trump calls them unfair on US

The European Union hit back at President Donald Trump's claims that digital regulations abroad are unfair, a day after he threatened to impose tariffs and other penalties on countries that tax online services ranging from social media to e-commerce.

"It's the sovereign right of the EU and its member states to regulate our economic activities on our territory that are consistent with our democratic values," European Commission spokeswoman Paula Pinho told reporters Tuesday in Brussels. 

Without specifying any government, Trump threatened export restrictions on U.S. advanced technology and semiconductors and higher tariffs in retaliation for nations' digital services taxes that hit American companies. His post on social media late Monday said that the measures "are all designed to harm, or discriminate against, American Technology."

Trump has long railed against EU tech and antitrust regulation over U.S. tech giants including Alphabet Inc.'s Google, Apple Inc. and Meta Platforms Inc. The U.S. has also recently pushed the European Commission to water down its AI Code of Practice.

In his post, Trump added that "they also, outrageously, give a complete pass to China's largest Tech Companies."

The Commission on Tuesday fired back at Trump's accusations that the rules — such as the EU's Digital Services Act and Digital Markets Act — are discriminatory and targeted at the U.S. 

"The DSA does not look at the color of a company, at the jurisdiction of a company, or at the owner of a company," European Commission spokesman Thomas Regnier said. "The DSA and the DMA both apply to all platforms and companies operating in the EU irrespective of their place of establishment."

Deal pending

The latest disagreement comes as the EU is preparing to publish legislation this week formalizing details of a joint trade framework it struck with Washington that will remove tariffs on certain U.S. exports.

Until that happens, the U.S. won't lower its 27.5% tariff rate on EU automobiles and car parts to a previously agreed 15%. 

The deal has been criticized by several member states and the European Commission, which handles trade matters for the EU, previously described it as asymmetric and not in the bloc's favor.

Commission President Ursula von der Leyen defended the agreement, describing it as "a strong, if not perfect deal." 

The EU faces a 15% tariff that is "all inclusive," von der Leyen wrote in a guest commentary for German newspaper Frankfurter Allgemeine Zeitung published on Sunday. "That allows European goods to access the U.S. market under more favorable conditions, which gives EU companies a significant advantage."

Pinho said that the Commission is planning to put forward its proposal in August, adding that "the deal indeed has provided for predictability and stability."

The transatlantic flareup harks back to Trump's threat against Canada in June that he'd abandon trade talks with the U.S.'s northern neighbor in retaliation for its planned digital tax. Days later the government in Ottawa backed down just before it was implemented. 

In the U.S.-U.K. trade deal, Britain's digital services tax was left unresolved, with Washington calling it " discriminatory, unjustified" and saying it "should be removed promptly."