Breaking news... The EU is being cautious due to the fear of Trump: It is hesitant to impose taxes on US companies
Quick Look
- The EU aims to increase its revenues to avoid a new trade conflict with US President Donald Trump.
- The European Commission is considering imposing a more comprehensive corporate tax that would apply to all companies operating in the EU, rather than targeting large technology companies, the Financial Times reported, citing officials.
- Some capitals oppose a fully digital tax, and expanding the tax to cover almost all large companies could be the solution, an EU official said.
AI-generated summary
Why It Matters
The EU aims to increase its revenues to reduce trade tensions with US President Donald Trump. Trump had threatened trade retaliation over measures he said discriminated against American companies. In June, he warned that countries that impose a digital services tax on US companies could face a 100% customs duty on their exports to the US.
Brussels is aiming to boost revenues amid contentious negotiations over the bloc's next long-term budget and spending pressures at home, as it tries to avoid a new trade conflict with US President Donald Trump.
The European Commission is considering imposing a more comprehensive corporate tax that would apply to all companies operating in the EU, rather than specifically targeting large technology companies, the Financial Times reported, citing six officials familiar with the talks.
"Some EU capitals oppose a completely digital tax because they do not want to anger the Americans. The solution is to expand the tax to cover almost all large companies," an EU official said.
HE THREATENED CUSTOMS DUTY
Trump has repeatedly threatened trade retaliation over measures he says discriminate against American companies. In June, he warned that countries that impose a digital services tax on US companies could face a 100% tariff on their exports to the US. Washington has also clashed with Brussels over the EU's Digital Markets Act, under which the Commission imposed heavy fines on Google, Apple and Meta.
What to Watch
AI outlook — possibilities, not facts
The European Commission will officially present its comprehensive corporate tax proposal shortly
Likely · Within weeks
US may reconsider trade threats over new EU tax policy
Possible · Within months
Open Questions
- What will the new corporate tax rate be?
- Will this policy receive support from EU member states?
- How will the USA react to this tax application?
