The European Union urged the United States on Monday, November 24th, to fulfill the trade agreement reached in July by reducing the tariffs imposed on EU steel and aluminum products. U.S. Commerce Secretary Howard Lutnick responded by stating that the EU must first relax its regulations on major U.S. technology companies before the U.S. can incorporate tariff reductions into the agenda.
Lutnick visited Brussels on Monday to meet with the EU trade ministers. He explicitly stated that if the EU wants the U.S. to exempt it from the 50% tariff imposed on its metal imports, it must loosen its rules on the digital industry and resolve pending cases involving companies such as Google, Microsoft, and Amazon.
After the meeting, Lutnick told reporters that the EU, consisting of 27 countries, needs to rethink its regulations on the digital industry to make them more “balanced.”
He noted, “Once they establish a framework that we are satisfied with and understand, and resolve these pending old cases, then I think we can start to address the issues of steel and aluminum.”
Lutnick urged the EU to “resolve” pending cases involving companies like Google, Microsoft, and Amazon and “establish a framework that satisfies us.”
He believed that due to the scale of U.S. tech giants, the EU’s tech regulations “targeted only U.S. companies,” especially the Digital Markets Act (DMA) and the Digital Services Act (DSA) that restrict the rights of major tech companies. The Trump administration has long criticized these regulations for “discriminating” against U.S. tech companies, with President Trump himself warning in August of imposing tariffs and export controls on countries discriminating against American tech firms.
In September, the EU Commission fined Google 29.5 billion euros for its search advertising behavior. Currently, the Commission is evaluating whether Google’s response is sufficient to satisfy Brussels’ regulatory bodies. Additionally, the EU Commission is also in talks with Meta and Apple regarding changes in a series of business practices, with both companies being fined a total of 7 billion euros in April. Last week, the EU Commission announced a new investigation into Microsoft and Amazon’s cloud computing services.
The EU Commission stated that regulation is the EU’s sovereign right. EU Commission officials emphasized that “the steel and digital industry issues are completely unrelated.”
EU Trade Commissioner Maroš Šefčovič countered, stating that the EU’s tech rules are not discriminatory and pointing out that the EU has also taken action against non-U.S. companies. The EU is currently investigating Chinese companies, Tencent and Shein, under the DSA.
Šefčovič expressed hope that the EU proposal to impose a 50% tariff on steel imports exceeding a certain quota will prompt the U.S. to lower its tariffs in joint actions against countries with excess production capacity. He emphasized that as long as the U.S. is “prepared to respond to our inquiries and our solution on steel,” the EU will “respond” to the U.S.’ concerns.
Under the July agreement, the U.S. set a 15% tariff on most EU goods, while the EU agreed to eliminate tariffs on many U.S. imports. However, due to the need for approval from the European Parliament and member states, the EU’s tariff elimination may not be realized until March or April of next year. The U.S. continues to enforce existing trade measures on steel and aluminum.
Since mid-August, the U.S. has applied tariffs of up to 50% on the metal content of 407 types of “derivative products” such as motorcycles and refrigerators. The EU is also preparing to implement a series of retaliatory measures. EU diplomats express concern that these measures, along with the prospect of imposing new tariffs on products like trucks and aircraft, threaten to “hollow out” the July agreement (deplete, lose substantive value).
In addition to the tariff dispute, the EU is also prepared to discuss joint efforts with the U.S. in economic security, particularly in response to China’s export restrictions on rare earths and semiconductors.
Šefčovič revealed that the EU has committed to purchasing $250 billion worth of U.S. energy products annually, with progress being made as they have already procured $200 billion worth of American energy this year.
(Adapted from reports by the Financial Times and Reuters)