President Trump says he is angry at the fact that the United States imports more goods, which it sends to the rest of the world. What he mentions rarely states that when it comes to services, the tables are turned.
Services sectors – which include financial, travel, engineering and medical industries more – are the largest part of the American economy. Exports of these services brought more than $ 1 trillion to the United States last year.
But this hegemony gives other countries some influence in negotiations – including the ability to impose some pain on the American economy as they look at revenge on Mr. Trump’s tariff for goods.
For example, the European Union can use the tools designed to restrict services that are included in the mass such as Google.
“The real financial lever ultimately enjoyed the ends of the services,” said Motaba Rahman, Managing Director of Europe at the Eurasia Group, a political research company. “It will escalate before getting rid of the escalation.”
The United States is the largest source of services in the world, and a large share of these services is delivered from financial services to cloud computing, digitally. The country has managed a commercial surplus in the services of approximately $ 300 billion last year.
Every time a European tourist remains in an American hotel, for example, the money that is spent in the services export basket is calculated. Every time someone in Canada, Japan or Mexico pushes listening to music or watching movies and TV programs made in the United States, they add to the surplus of America in the service trade.
Many countries targeted by the United States target customs tariffs with a deficit in services with the United States, including Canada, China, Japan, Mexico and many Europe, according to the American Statistical Office.
“The European Union has now been equipped with policy tools to expand the scope of revenge on the American customs tariff to target imports of American services,” said Philipo Taddi, Managing Director of Global Investment Research at Goldman Sachs.
It can be said that the most extreme option is known as Sagittilation anti -tool. The tool was proposed for the first time in 2021, but it allows the European Union to hit a commercial partner with a “wide range of possible counter measures”.
These measures may include definitions and restrictions on trade in services and borders on trade -related aspects of intellectual property rights. This can affect American technology giants such as Google. Many European diplomats said that the use of the tool is a clear possibility, if the trade war escalates.
While possible restrictions aimed at services will be a new response to the trade war, Brussels has a history of punishing the American technology industry for other reasons. For more than a decade, the European Union went after the largest silicon Valley companies for anti -competition business practices, the space of the weak data privacy of the data, and the policies of moderation, the relaxed content.
The aggressive supervision of Europe has led to remarkable changes in the product because the European Union, the home of about 450 million people, is a main market. Google changed the way the search results were presented, Apple amended its application store, and Meta made adjustments to Instagram and Facebook due to the European Union rules.
The goal of the technology industry would increase the dispute with the Trump administration on organizing European technology. Even before facing the customs tariff, senior officials, including Vice President JD Vance, criticized the European Union for what they consider to be the excessive organization of American technology companies.
Once this week, the European Union was expected to announce new fines against Apple and Meta to violate the digital market law, a law approved in 2022 aimed at facilitating smaller companies competing against technology giants. Meta and X are investigated by another new law, called the Digital Services Law, which requires companies to do more to purchase their platforms for unconditional content.
Britain, on the other hand, may use its bases on service imports as a islands instead of a stick.
For weeks, British officials have tried to reassure the public that in a strong position to negotiate with the Trump administration to avoid definitions, which indicates repeatedly to the relatively balanced goods trade between the two countries. (Britain has a surplus when it comes to services.)
However, one of the painful points of the Trump administration officials is the Digital Service Tax in Britain, which they say unfairly harm the American technology giants. The tax was offered in 2020 as a 2 percent tax on search engines, social media and market services online. It is expected to raise the equivalent of more than a billion dollars to the British Treasury in this fiscal year.
British officials said the changes in this part of the negotiations with the Trump administration. “We have to get the right balance.”
Britain has sought to place itself in the “Goldilocks region” between the United States and the European Union, according to researchers at Chatham House, a research institute, and maintains good relations with both the organization.
The researchers, Alex Krasudski and Olivia Osoulivan, wrote if the cancellation of the digital services tax brings “a beloved deal for the United Kingdom that avoids the worst US tariff, it may prove a major blow.” “But this is very uncertain – the president’s implementation of definitions was on a continuous flow.”
They added that Britain will eventually have to choose a closer loyalty to the United States or the European Union.
