Brussels to hit US where it hurts: Services sector on tariff list Details by FT

The European Union is preparing a detailed list of potential retaliatory measures targeting US services and exports, including possible export controls, should trade negotiations with Washington fail to yield an agreement, according to two officials familiar with the matter, who were quoted by the Financial Times as saying.

The European Commission, which is drafting the list in response to US President Donald Trump’s announced tariffs, has yet to formally present the proposed actions to EU member states. Trump has declared plans to impose 30% tariffs on EU goods beginning August 1.

While Brussels has previously signalled that services could be drawn into the widening transatlantic trade conflict if no breakthrough is achieved, it has until now refrained from circulating concrete measures to European capitals.

One official emphasised that the proposed list would not be limited to US tech firms, despite their strong lobbying presence within the Trump administration.

The forthcoming services-related list would complement an already existing €72 billion retaliation package under discussion among EU countries. That package includes proposed tariffs on key American exports such as Boeing aircraft, automobiles, and bourbon.

A source familiar with the latest proposal confirmed that it would feature levies on digital services. This aligns with comments made by European Commission President Ursula von der Leyen in an April interview with the Financial Times, in which she cited the possibility of imposing a tax on advertising revenues from digital platforms.

Bernd Lange, chair of the European Parliament’s trade committee and a regular recipient of briefings on the talks, welcomed the move. He noted that while the US maintains a trade deficit with the EU in goods, it runs a significant surplus in services, rendering it more exposed to countermeasures in that domain.

“It is unlikely we will reach a balanced and acceptable deal with the US, so it is essential to prepare,” Lange stated. “US tech giants derive a significant portion of their income from Europe, and the US holds an annual services trade surplus of roughly $100 billion. That’s why it’s important to prepare a third step in escalation — introducing a digital services levy.”

The Commission may invoke the EU’s enforcement regulation to formally draft the list of services subject to tariffs, a step which would require approval from all member states.

In addition to the proposed service tariffs, the new package reportedly includes the EU’s first planned export controls. These would introduce fees on the export of certain goods, including steel scrap and selected chemicals. European steel scrap is often shipped to the US, where it is melted in electric arc furnaces and repurposed into new steel products.

Trade negotiations between the EU and the US have been ongoing since April, when Trump first announced 20% “reciprocal” tariffs on EU imports. He later reduced the figure to 10% to allow room for talks ahead of a July 9 deadline, which has since been extended to August 1. However, on July 13, Trump escalated tensions by threatening to raise tariffs to 30% if no deal is reached by the new deadline.

According to the two EU officials, Brussels may be willing to accept a 10% general tariff, but it is pushing for a reduction in the separate 25% sectoral tariff currently applied to automobiles. The EU is also seeking assurances that pharmaceuticals and semiconductors will remain exempt from any future US sector-specific duties.

EU trade commissioner Maroš Šefčovič is currently in Washington for high-level negotiations. On Monday, he acknowledged that “a significant gap” remains between both sides. While reiterating the EU’s preference for a negotiated outcome, he confirmed that “all instruments” for retaliation remain under active consideration.

Separately, the Commission has postponed until August 6 the implementation of a separate set of retaliatory tariffs — targeting €21 billion in annual US imports — in response to earlier duties imposed by Trump on EU steel, aluminium, and automobiles. This delay is intended to leave space for continued negotiations.

By Tamilla Hasanova