Even supposed allies have disagreements about the finer points of their alliances, and a long-running disagreement about how American technology companies operate in Europe may be coming to a head this week.
President Donald Trump has made no secret of his intentions to use tariffs and the threat of tariffs to persuade both allies and enemies to support his agenda.
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In his latest move on Friday, Trump signed a memorandum defending U.S. tech companies from what the White House says is “any act, policy, or practice in the European Union or the United Kingdom (that) incentivizes U.S. companies to develop or use products and technology in ways that undermine free speech or foster censorship.”
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The administration also targeted digital service taxes (DSTs) that U.S. companies are subject to across the Atlantic. The White House says it will “consider responsive actions like tariffs to combat DSTs, fines, practices, and policies that foreign governments levy on American companies.”
Apple CEO Tim Cook’s company was targeted with a big fine from the EU in 2024.
Justin Sullivan/Getty Images
Congressional Republicans join the fight against the EU
Over the weekend, U.S. Rep. Jim Jordan (R-OH) followed up on Trump’s memorandum and addressed a letter, co-signed by Scott Fitzgerald (R-WI), to EU antitrust czar Teresa Ribera, asking her to clarify the political bloc’s Digital Markets Act while stating their belief that the regulations target American companies.
The DMA allows the EU to levy fines of up to 10% of a company’s global annual revenue, and U.S. politicians are unhappy about this.
“These severe fines appear to have two goals: to compel businesses to follow European standards worldwide, and as a European tax on American companies,” Jordan said in the letter, which was viewed by Reuters.
The EU adopted the DMA in 2023, but it wasn’t until 2024 that a U.S. company ran afoul of the law.
Apple (AAPL) received the ignominious honor of becoming the first company to be sanctioned under the DMA on Nov. 5. While this is Apple’s first strike under the new DMA, it isn’t the first time the EU has fined the world’s most valuable company.
In 2023, Apple was issued a $1.95 billion fine for how it treats Apple Music competitors.
The European Commission claimed that Apple has been restricting app developers “from telling iOS users about alternative and cheaper music subscription services” for the past decade, leading Apple users to pay higher prices for music streaming services.
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However, that fine would pale in comparison to the potential $30 billion in fines the company could face under new rules.
Silicon Valley gets bipartisan support from Washington
While President Trump’s return to the White House has featured a seemingly open-door policy for some of Silicon Valley’s tech giants, the support for American big tech has been bipartisan lately.
In late 2023, a bipartisan group of lawmakers warned then-President Joe Biden that the DMA, which would take effect just months later, would unfairly target U.S. tech companies while leaving Chinese tech giants like Alibaba, Huawei and Tencent unscrutinized.
However, while Silicon Valley may have had a sympathetic ear, the previous administration never laid out a plan to company the EU. Meanwhile, the current administration has made its position clear.
Trump will use tariffs if he has to.
The Trump White House notes that the U.S. digital economy has been larger than the entire GDP “than most countries,” including Australia, Canada, and most members of the EU.
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