The German government wants to give Trump a taste of his own medicine with a ten percent import tax on American digital services. Bad news for Google and Microsoft, and possibly also for people and companies that use them.
Trump’s import tariffs have already caused much commotion worldwide. Although it’s still unclear whether they will actually be implemented or not – Trump is battling it out with the judiciary in his own country – Germany is already choosing to counter-attack. A tax on digital services of American origin that directly affects Microsoft, Google, Facebook and co is on the table according to Reuters.
Minister of Culture Wolfram Weimer has informed German media that a bill is being drafted to tax ten percent of the income from digital services. He additionally accuses the American tech giants of “cunning tax evasion”. “These companies earn billions in Germany, but they give back far too little to society”, Weimer reportedly said in an interview with the German magazine Stern.
Oil on the fire
Germany would not be the first country to open a fiscal attack on Big Tech. In the European Union, France and Spain have already introduced similar taxes. The measure that Germany wants to introduce, however, threatens to add fuel to Trump’s fire. The president has already threatened that countries imposing taxes on American companies should not count on his mercy.
The possible consequences of a tax on American digital services for end users remain to be seen. The companies themselves are still keeping a low profile for now. Any taxes could potentially be passed on to end users, who might therefore also face higher subscription prices.
In turbulent geopolitical times, digital sovereignty is increasingly coming to the fore. The European Union realizes that it is too dependent on American technology, and this sentiment seems to be gradually seeping into the business world as well. Cloud providers are trying to alleviate this with promises of data sovereignty and privacy, but experts are skeptical about this. The idea that the American cloud could even become illegal in the EU is not as crazy as it sounds.
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