Did Trump's tariffs help American tech giants turn the tide? EU reportedly abandons digital tax

With the help of tariffs, U.S. President Trump may turn the tide for American tech giants facing new tax threats from the European Union.

According to media reports on Friday, July 11, Eastern Time, as the EU and the U.S. are in the final stages of negotiating a trade agreement, a document circulated on Friday shows that the European Commission has abandoned plans to tax digital enterprises, effectively making Trump and American tech giants like Apple and Meta the winners.

The report cites the aforementioned document stating that the EU has removed the option of a digital tax from its proposed seven-year spending plan. The report points out that this spending plan is actually unrelated to the EU-U.S. negotiations and is related to the seven-year budget proposal for 2028-2034 that the European Commission is drafting. EU officials are discussing which taxes will appear in the budget proposal to be announced by the European Commission next Wednesday.

Media outlets believe that the cancellation of the digital tax plan represents a significant shift for the EU, as the budget document discussed by EU member state commissioners in May mentioned the idea of repaying EU debts through taxes on tech giants. This policy reversal may be a strategic move by the EU, which is eager to secure favorable trade terms with the U.S.

According to the document, the EU does not intend to impose a digital tax but proposes three new taxes on electronic waste, tobacco products, and large enterprises operating in the EU with revenues exceeding 50 million euros. The goal is to generate 25 to 30 billion euros annually to repay the common debt incurred by the EU to fund post-COVID-19 recovery.

Media reports indicate that the document may still be modified by officials before its formal announcement. It lists potential tax items but does not quantify the revenue that each tax might generate.

If the media reports from Friday are accurate and the content of the document remains unchanged until its announcement next week, it would mark another instance of the Trump administration forcing U.S. trade partners to make concessions on digital taxes, following Canada.

According to CCTV News, on June 27, Trump posted on social media that he learned Canada announced it would impose a digital services tax on U.S. tech companies, calling it a "direct and blatant attack" on the U.S., and that Canada was clearly imitating the EU. Trump stated that in light of this shocking tax, the U.S. would terminate all trade negotiations with Canada, effective immediately. The U.S. would inform Canada of the tariffs to be paid for trade within the next seven days.

Just days after Trump halted negotiations and threatened potential new tariffs, Canada withdrew its digital tax.

According to Xinhua News Agency, on June 29, Canada's Ministry of Finance announced it would cancel the digital services tax originally set to take effect on June 30 to advance trade negotiations with the U.S. The Canadian Ministry of Finance stated in a press release that Canadian Prime Minister Carney and U.S. President Trump had agreed to resume negotiations with the aim of reaching an agreement by July 21.

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