Report from the Washington Post
In Brief – Following an announcement from US President Donald Trump that new “reciprocal” tariffs would be paused for 90 days for all countries other than China, the EU announced a similar delay in the 25% tariffs it had announced in response to the US steel and aluminum tariffs imposed in March. That set of US tariffs was expected to impact over $25 billion in EU exports and the EU retaliation list hit a collection of US exports including agriculture products, steel, tobacco, and yachts, valued around $23 billion. European Commission President Ursula von der Leyen had responded to the additional US tariff rounds, both against auto exports and then the 20% across-the-board duties announced on April 2, by emphasizing diplomacy over escalation, including delaying until the end of April additional retaliation besides the counterpunch to the steel and aluminum tariffs, and hoping negative public and market reaction in the US could lead Trump to step back. He did.
Context – A trade war between the US and EU probably won’t be caused by tech regulation, but Big Tech’s treatment in Europe is intertwined with the trade standoff. The EU runs a major surplus with the US in goods, while the US has a big, although smaller, surplus with Europe in services. Retaliation against those services exports, including digital services, is on the table if the trade conflict escalates. Top US officials also argue that EU “gatekeeper” regulation and digital taxation discriminates against American businesses. Penalties for Apple and Meta in the first DMA investigations are expected soon, but may be delayed while the tariff battle plays out more, and fines may be modest with a focus on conduct remedies to avoid tariff antagonism. But EU officials repeatedly say they will not walk back their digital rules, and they almost certainly won’t. The first big US target under the DSA is X, with lightning rod Elon Musk’s platform in line for a big fine and a rejection of its speech moderation policies, which could prove especially explosive with the Trump Administration and even European populist conservatives.