Donald Trump ordered a formal investigation under Section 301 of the US Trade Act of 1974 on Friday 24 July into the European Union's digital-enforcement practices, accusing Brussels of "ROBBING" American technology firms and promising a "substantial TARIFF" at "the earliest possible moment".1 Section 301 is the provision that lets a US president impose retaliatory duties once an investigation finds that a trading partner's conduct burdens American commerce. This is the digital-enforcement file; a wholly separate forced-labour determination under the same provision happened to take effect on the same date.
The day before, Jamieson Greer, the United States Trade Representative, had said the Commission's decision against Google "creates massive uncertainty for U.S. exports" and noted that Google's cumulative European penalties now exceed 2 per cent of the entire EU budget.2 Trump added his own framing on the Friday: the US "is not a PIGGYBANK for Europe".3
He made a near-identical threat on 26 June, promising tariffs of up to 100 per cent against countries levying digital taxes, and no schedule ever followed. An opened investigation behaves differently from a social-media post. It has a docket, a comment period and a deadline, and it ends in a determination that can be pointed at a named list of goods. That is the mechanism worth watching over the coming months, rather than the rhetoric attached to it.
Reported retaliation candidates run to the digital services taxes levied by Spain, Italy and France, with Nokia, Airbus, BMW and Volkswagen named in coverage as targets.4 The awkwardness for Washington sits in the sequencing. Tariff pressure has real purchase on legislation Brussels has yet to pass, which is how the trade lever worked earlier this year, and almost none on a Commission decision already adopted, served and running to a compliance deadline. Retaliation cannot unwrite the ranking-data obligation; it can only make the next European instrument more expensive to legislate.
