The ongoing U.S. trade war has put tech giants like Apple Inc. AAPL, Facebook-parent Meta Platforms Inc. META, and Alphabet Inc.’s GOOG GOOGL Google at the heart of negotiations, with the EU preparing retaliatory measures and the U.K. offering tax relief to secure lower tariffs.
What Happened: The U.K. government made a move to pacify President Donald Trump’s tariffs by offering significant tax relief to U.S. tech giants. U.K. Prime Minister Keir Starmer proposed reducing the digital services tax (DST) for major U.S. tech firms in exchange for lower tariffs, reported The Guardian.
The UK government is hoping this tax concession will help secure a carve-out from Trump’s tariffs, particularly targeting products like cars and tech. The proposal would apply to companies like Apple, Facebook, Google, Amazon.com, Inc. AMZN, and others, which are currently subject to the UK’s DST.
At the same time, the EU is preparing to retaliate against the new U.S. tariffs, which have already impacted European exports, especially in the tech sector.
French Economy Minister Eric Lombard indicated that Europe might strengthen regulations on U.S. tech firms, especially regarding data usage, reported Politico.
There is also the possibility of imposing new taxes on digital services if the tariffs continue to escalate. In contrast, Ireland, where many U.S. tech firms have their European headquarters, has fiercely rejected these ideas, citing the potential impact on its economy.
Why It Matters: Two of the U.S.’s largest trading partners—China and the European Union, accounting for 8% and 13% of total trade volumes, respectively—have signaled intentions to retaliate.
China has already implemented 34% reciprocal tariffs on all U.S. imports, while the European Union is expected to announce countermeasures later this week.
In addition, the tariffs have brought together regional competitors—China, Japan, and South Korea—who are now coordinating a collective response.
Over the weekend, senior White House officials reported that more than 50 countries affected by the U.S.’s reciprocal tariffs have initiated contact to begin negotiations.
This development comes as U.S. stock futures continued to plunge over the weekend, with Dow, S&P 500, and Nasdaq futures falling by 2.7%, 6%, and 5.7%, respectively. Additionally, the U.S. dollar saw its sharpest drop since November 2022, sliding 1.7% on Thursday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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