As the United States renews tariff threats, European leaders are considering possible countermeasures, but targeting American services remains a high-stakes dilemma. Officials say striking at US services could hurt Washington more than tariffs on goods, yet it carries significant risks that could escalate trade tensions.
Since trade disputes with the US intensified last year, the EU has largely avoided targeting services, despite a €148 billion US trade surplus in these sectors in 2024. Access to European consumers is critical for American financial institutions and tech companies, making services an effective leverage point—but one that European officials approach cautiously.
EU leaders are scheduled to meet Thursday night to discuss a response to President Donald Trump’s latest tariff threats over Greenland. Diplomatic sources told Euronews that France, Germany, and Spain raised the option of using the EU’s anti-coercion instrument, a mechanism designed to counter economic pressure from third countries. The tool, never used before, would allow Europe to restrict licenses for US services or intellectual property rights, acting as a potential last-resort measure.
Other options discussed in the past include a tax on digital advertising revenues, floated by Commission President Ursula von der Leyen during previous tariff disputes. Such a move would target tech giants such as Meta, Google, and Facebook, which generate the bulk of their revenue from digital advertising.
Experts say the risks of striking at services go beyond political retaliation. “Hitting services has a greater potential impact, but it is less common than hitting goods with tariffs and could therefore be viewed as an escalation,” said Varg Folkman, a trade analyst at the European Policy Centre. “Tech and financial companies are powerful and have Trump’s ear. Targeting any of them would be a drastic action and make a lot of noise.”
Europe’s reliance on US services complicates matters. Core infrastructure, including cloud providers like Microsoft and Amazon Web Services, and payment systems such as Visa and Mastercard, is dominated by American firms. Blocking access could disrupt operations for EU businesses and consumers, leaving few domestic alternatives.
Instead of direct retaliation, Brussels can use existing competition and digital regulations. Measures such as the Digital Markets Act and Digital Services Act allow the European Commission to fine large tech companies for anti-competitive practices or failure to address illegal content. Folkman noted that the EU could step up enforcement on platforms such as X, pushing investigations or fines to exert pressure without triggering a full-scale trade war.
European officials stress that regulatory enforcement is non-discriminatory and applies equally to companies from all countries, aiming to balance pressure on US firms with wider market fairness. While goods remain the first line of response to US threats, services are on the table—but only as a carefully measured option.
