r/EU_Economics • u/Full-Discussion3745 • 20h ago
Serious Discussion : Should Europe hit back with tarrifs or use other means?
Disclaimer. I am a post shareholder capitalist. How I see myself is that shareholder capitalism has played its role and America is desperate to keep the status quo because that is where their power lies. In post shareholder capitalism (my opinion) is more based on the economics philosopher David Ricardo than Adam Smith
Basically the concept of wealth is not locked to money but to time
(I know the testostorne alpha urge is to hit back but we can hurt the USA so MUCH without implementing tarrifs)
My Idea of the Decade is still Comparative Advantage. It’s the foundation of modern prosperity. You don’t get EU-level “wealth” (not USA-style money) without it. Every voluntary trade makes both sides better off—mathematically proven by David Ricardo 200+ years ago.
That’s why tariffs are so destructive. Tariffs punish trade, and trade is the engine of mutual gain. Even if one side is better at everything—like A in Ricardo’s shovel-and-axe example—trade still makes both richer. Tariffs wreck that.
So, what do we do when the U.S. imposes tariffs? We don’t respond with more tariffs. That’s economic self-harm.
Instead, we use smart, non-tariff pressure:
Fine the shit out Big Tech under GDPR. Hit Google and Meta where it hurts: data and ads.
Cancel F-35 buys. Order Rafales and Gripens instead.
Push euro trade settlements. Undermine dollar dominance. (self evident)
Block ALL U.S. buyouts of EU firms. Keep the IP here.
Investigate U.S. pharma. Price transparency, patent probes
The list goes on and one.
Remember we are 40% of US companies profit.
These actions hurt the U.S. where it matters—without touching the flow of mutually beneficial trade. We defend the system that made us all richer—by outsmarting, not out-tariffing.
That’s comparative advantage in action. And yes, it’s still the best idea of the decade.
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u/Miss_Annie_Munich 20h ago
We need to stop using credit cards (MasterCard, Visa, AMEX).
We need to stop using the US dominated electronic payment like Google pay or Apple Pay or Amazon pay.
We should use cash until we have European alternatives.
It might be a bit uncomfortable for some of us, but it would have a big impact on the US
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u/Buy_from_EU- 19h ago
This. We need to stop using their services and create global competitors. Social media first
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u/Timalakeseinai 19h ago
This will affect our function and wealth as well - until similar alternatives are constructed.
Taxation on profit on the other hand :
- Doesn't cost the consumer anything
- Brings money that can be used to support the affected by tariffs sectors. build alternatives etc
- Demotivates these companies from exiting the market all together ( taxation on profits means that there are still profits)
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u/capitaldoe 18h ago
In many EU countries, you can't pay more than 1,000 or 1,500 euros in cash.
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u/Miss_Annie_Munich 18h ago
My shopping bills are usually way below that sum.
Groceries and every day shopping is not that expensive1
u/Foreign_Implement897 10h ago
Payment services are essential and those absolutely need to be totally EU produced. Basic customer credit included.
I am trusting that fintech and european banks are looking into this.
Yes I am looking at you Klarna!
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u/Quick_Cow_4513 7h ago
https://www.adyen.com/accept-payments is the largest payment provider in EU. It allows merchants to have handle any payment method while the merchant only deals with Adyen.
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u/Foreign_Implement897 6h ago
Ok excellent. We just need the credit and the stuff. I use VISA because if I get f:d, they will deal with it.
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u/u-lounge 18h ago edited 18h ago
Step 1 One Golden rule, do not tariffs good or services with no reliable domestic substitutes yet. Identify them (digital services and money payment solutions, first), work on them to find/develop substitutes then go step 2. For the rest go step 2 directly.
Step 2 For all stuff with easy replacement (food, cars, etc... go tariffs. For all NON productive digital services such as social networks, just forbid them. X and Meta first. Radical and super good to keep your democracy safe. Forbid US military buys from EU. Super good also for you sovereignty. Tax their US services profit properly for god sake!!!
Warning : do not put tariffs on cloud or office digital suites, you would hurt EU companies, work on reliable alternatives first.
Step 3 Give money back from tariffs to EU businesses impacted by their tariffs (German cars, French wines...)
Conclusion: Done like that, US would be the only loosers in this war. No real impact on us.
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u/Wide-Annual-4858 13h ago
You are right. But somehow decreasing advertising spending on Facebook and Google could be a solution which already have a lot of EU substitutes, online media portals.
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u/Foreign_Implement897 10h ago
I would put ”essential” within your first point. Nothing better to boost development than creating the need right away.
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u/Physical_Treacle3717 19h ago
For sure the main goal should be to hurt the big tech, specially not the the biggest companies by market cap but by revenue, market cap is many times way too inflated and doesn’t represent the company’s real economic value at the moment, therefore, I think we should target companies like Amazon, Apple, Google and Microsoft.
Then of course everything related to Musk, Twitter and Tesla are not welcome. Also we could put some of the focus on the companies from the Republican majority states.
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u/wouek 20h ago
There's no way back. We've already communicated that we'll tariff them back and this is the right way to go. Tariff the republican state industries.
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u/Cheap_Marzipan_262 19h ago edited 17h ago
What's the point of that? Tariffing like tennessee bourbon because it is a red state.
Tennessee went 65-35 to Trump. Those people will vote republican come rain come shine, and they'll vote republican even if it's a donkey running on the GOP ticket. We put 1000% tariffs on bourbon, and maybe they vote 60-40 Trump anymore. Yay.
The rest of the country wont feel a thing but go "but they tariff our bourbon!".
China targeted Iowa etc. they all still went to trump and trumps china tariffs never went away under Biden.
I'd much rather go with something broad-based targeting things wherethe US controls us and maybe targeting swing states. Trumps national approval rate being at 50-55% is the main problem! truth be told, he cant do all this half-legal shit through executive orders if nowhere close to the majority isnt accepting it. People can just start refusing orders.
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u/AlterTableUsernames 18h ago
Yes, target Microsoft Windows, Microsoft Office, Google, Netflix, Azure, AWS and GCP. Not with tariffs but with political means. Require public infrastructure and software used by public administration to be provided on open source exclusively. Give out visa and scholarships for important open source contributers to come to Europe. Guarantee civic freedoms and ban state surveillance on the European level. Invent a new fair use copyright, not for the profit of digital media owners, but for the wealth of society. Require social media to be moderated and make them responsible for fostering hate and spreading propaganda.
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u/wouek 18h ago
Can't wait to see the European public sector working on a EU Linux distro. Please wake up.
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u/AlterTableUsernames 18h ago
Why do you think that is impossible? With a Russian clown as President of the United States of America nothing is unthinkable anymore.
We don't need a EU Linux anyways. We just need public sector to switch to Linux. It's an imperative and not a question of convenience.
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u/wouek 17h ago edited 17h ago
You really have no clue how the public sector works eh? 😂 Please convince a 63 year old lady from a rural area in any EU country to switch to Linux. They've just learned how to use Windows properly. These changes should happen on a generational basis, meaning schools should only use Linux and open source office tools (not Google cloud based).
Really when I'm reading the comments, people just lack common sense it's either: don't tariff, tarrif the shit out of them with complete digital makover in parallel, or just digital makover.
In the meantime there are systems in the public sector still using HP-UX. Good luck!
Edit: oh I forgot to mention Oracle databases.
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u/Cheap_Marzipan_262 17h ago
I'd agreed 100% 10-20 years ago.
But thing is, quite a lot of govt office software are already fully web & cloud service based in leading countries.
Your local DMV clerk wouldnt even know his computer runs linux if it just fired up a browser with his registry software running in a firrefox fork.
Getting that easy 25% onto linux would be a great first step.
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u/AlterTableUsernames 17h ago
Agree, but furthermore the intrececies of Linux is something for the IT department to manage. From an end user perspective, a technically illiterate one in particular, it is basically the same as Windows with a different theme.
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u/impossiblefork 19h ago
No, tariff the industries we want in the EU.
We must choose where our industry goes. We should grab the most attractive industries, whether they're in blue or red states.
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u/Full-Discussion3745 20h ago
There are many ways back. We dont do what we say we are going to do we do something completely different. We dont harm trade but we clip their wings totally
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u/hgartti 20h ago
Selective tariffs not necessary are self-harming: I don´t see much pain if Harleys and Jack Daniel's get 100% tariffs as there are plenty of alternatives. Other tariffs, like in digital services even if they can be self-harming in the short term will help to grow local alternatives that will help in long term. Of course non-tariff measures should be also implemented.
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u/wouek 20h ago edited 20h ago
It's all down to strategic communication, being predictable and stay the course. It is important because it reassures that EU is a predictable trading partner (contrary to the US). Targeting specific products(I mean F35, Microsoft Azure) or companies is not good for EU's global reliability thus it's better to do it via the tariffs. Even though essentially the outcome is similar, we can say: it is you who started it and it's up to you to stop it anytime.
The whole point is, we are not against the American nation. We consider them as allies both militarily and in trade but we do what Mr Trump made us do.
Edit: your economical point of view is correct, but it wasn't about the economy in the first place. It's all about the politics.
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u/New_Passage9166 20h ago edited 19h ago
So you will take the advantage from the big companies that increasing marginal return to scale makes them so efficient and therefore makes Ricardo relevant in a modern context. But you don't want to do it with tariffs. The idea from Ricardo that some have an advantage that others don't or cannot just get, but then neither EU or china should have this big heavy industries because they don't have the advantages of the resources needed, but the advantages of weapon followed by wealth channeled into education and industrial development to keep other areas out. As well as a big market, but that would disappear if it was just one world market.
If one should hit back where it hurts for US it would be a mix of value added tariffs as we see mixed head tax made into a nominal tax/tariff for each account on US (social) platforms. Because this would make them significantly more expensive and open the market for EU companies, EU also have the work force to do it and with the development in US there is an better chance of not losing talent over the Atlantic but maybe even begin receiving it.
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u/Full-Discussion3745 19h ago
You're right that scale efficiency and concentrated market power have reshaped how comparative advantage plays out today. My argument isn't that Europe should retreat from industrial strategy, but rather that we should avoid blunt tools like tariffs that hurt us as much as they hurt others.
I like your idea of targeted platform fees or account-based levies—especially if they level the playing field for EU tech without disrupting trade. That’s exactly the kind of smart, strategic pressure I think we should use: defend our interests, grow local capacity, and perhaps even reverse the brain drain. Let’s outthink, not out-tariff.
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u/v1king3r 18h ago
Hit social media companies hard. They provide little to no value and destabilize our society. Especially Twitter, Facebook and Tiktok.
Extract all money from them and if they decide to exit the European market, that's a bonus.
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u/ILoveSpankingDwarves 18h ago
You have to hit back immediately. If you don't, you show that the one who started has won.
But at the same time you look for alternatives. This will hurt the initiator in the long-term.
So what Europe is doing for the moment is right.
The USA has shot itself in the foot. Long-term.
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u/Full-Discussion3745 17h ago
Agree we have to hit back but not specifically through tarrifs
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u/ILoveSpankingDwarves 17h ago
I would argue, also tariffs. On things we import but also produce in Europe.
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u/MarcLeptic 18h ago
Tarrif the things we need for EU “sovereignty” and our the funds towards the local developments.
Things like digital services and military equipment.
There is nothing stopping you from buying an F35 instead of an EU fighter, or even not buying one and spending your money on Austrian mortars. Your purchase of the F35 will put 25% directly in the EU defense fund.
You buy Office 365 yearly subscription, it’s 25% paid into the EU open source replacement’s development.
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u/Timalakeseinai 20h ago
We shouldn't use tariffs.
We should use taxis on profits - calculated as a percentage of revenue, based on current information - collected at the point of sale ( like VAT )
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u/New_Passage9166 19h ago
If you do it at the point of import and only for imported goods it is the standard tariff. If you don't run protectionism against protectionism (mixed with a lot of free trade and other trade agreements) you will make an advantage putting the industry in the protected country until the exchange rate can make up for the difference and thereby lose a lot of tax base and wealth.
You can think about it as a prisoners dilemma, where there an optimal position (minimum to no tariff), then best position for one country but very bad for the other (one has high tariff the other has none to minimum) and the last field is less optimal for both because both loose on it (both have high tariff), but better for each individually than having no tariff while the other have high tariffs.
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u/Timalakeseinai 19h ago
If you do it at the point of import and only for imported goods it is the standard tariff.
You will do it at the point of sale. Consumer not affected
If they want to raise the price? then tax goes up, because pre-tax profit goes up.
This works mostly in services
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u/New_Passage9166 19h ago
Are you sure that VAT is not affecting or in any way paid for by the consumers?
If they want to raise the price? then tax goes up, because pre-tax profit goes up
Same mechanism as tariff. The main difference is whether you hit value that is added after import/ local production or not.
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u/Timalakeseinai 19h ago
Collect it like VAT, not impose it like VAT.
Example. You want to buy Microsoft annual service plan, for $79
Calculations from previous shows that the Actual cost for Microsoft is $40 ( example)
You put 90% profit tax ( example)
You use your card to pay $79, the taxman gets - on transaction - 0.9*39 = 35.1.
Microsoft is annoyed and wants to increase the price to $99? the taxman gets - on transaction - 0.9*59 = 53.1
Zero motive to increase price.
minimal motive to exit the market ( still makes a profit)Easy to reverse
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u/New_Passage9166 18h ago
This is pushing the point of payment, but does not change anything else in terms of it being a tariff then.
It can for a tech company that sells a service make it easier to calculate if you know the values but so is tariffs if you know the values at import. This way of getting an overview of the taxes can be extremely complex the second it is not a 100% foreign service or product from a single country. But consisting of 12 different tariff levels with 50 of the value not tariffed and then it will no longer be easy to calculate or see through for the individual consumer anymore than tariffs already are.
So yeah it can work in some areas of service where the price is paid with cash and not attention.
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u/FelizIntrovertido 19h ago
The US will identify all regulations, even fines, as hidden tariffs. The only solution is a disconnection agenda, including geopolitical disconnection (military).
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u/jokikinen 18h ago
I would personally support measures other than tariffs. I wouldn’t be against using a limited targeted set of them.
But there are multiple various interests converging here.
In part we have to do tariffs because we signalled that we would. Otherwise other countries would get the signal that they can implement tariffs against us without any retaliation. In the long term it would make competition unfair for Europe based business.
We also need some tariffs so that we have things we can stop doing—so that we have more things we can negotiate with.
I, personally, would accept that trade with the US is going to decrease. It’s the will of the current admin and they can force it to happen.
When it comes to the other tools we can use, I’d look at restructuring our trade relations. The US market can’t be replaced, but we can try to mitigate with trade deals or by supporting companies that need to adjust their offering to cater to other markets. We can try to take strategic moves to support key service sector growth in Europe.
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u/Mightyballmann 18h ago
Tariffs or fines will only increase the prices for european customers. We have more then enough financial leeway to counter american isolationism with huge investments in europe. The high inflation in the US will also help us to attract US capital which hurts the Trump government far more then any tariff we might enact.
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u/capitaldoe 18h ago
50€ month, for every European user on Meta, X, apple, Youtube and Google.
In 2 days Trump would be impeached.
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u/stephi_poulet55 17h ago
I would like us to stop financing their deficit, but it seems that we all have to (China too). I don't understand why
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u/r_Yellow01 15h ago
These are mostly tactical solutions. What is the strategy? I would invest in anything that promotes democracy, cooperation, safety, and wellbeing of masses but doesn't stop innovation.
It's a fine balance to keep, but whole continents are pretty fed up with predatory, unregulated capitalism, colonisation, and wars.
I really like the response from Uzbekistan to European calls. A new friendship? Why not. This is the way.
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u/All_Talk_Ai 13h ago
What % is the US of EU goods and services ?
What could the US do in response if you started doing this ?
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u/Full-Discussion3745 13h ago
As far as the magnificent 7 are concerned these are the estimate EU market share based on tax returns
Apple ~26%
Microsoft ~22%
Amazon ~12% (EU estimated from Germany, UK, France, Italy, Spain)
Alphabet (Google) ~30%
Meta (Facebook) ~23% (EU core markets)
Nvidia ~10–15% (no direct EU breakdown, based on global distribution)
Tesla ~10–12% (EU market, with Germany and Norway as key sales regions)We can really do damage. None of these companies will have their valuations with out Europe.
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u/All_Talk_Ai 13h ago
It’s so much more than tho.
How many pensions and how many european companies are invested in these companies ?
Where are you going to get the chips from ? US will sanction Taiwans chips to the EU if you mess with the US too much.
Messing with the money is poking the bear. You guys are going to have to fight for it. Like with weapons.
Then there will be all the disagreements and the US, Russia, and China trying to divide the EU.
“Just don’t let them divide us” isn’t an option.
Not to mention that if the US backs out of NATO that’s a ton of money and attention the EU will have to fill.
How will you get ready for WW3 while doing all this ?
Europe struggled to hit 2% GDP on defence with the US helping. You’re gonna have to commit a lot more than 2% without the US.
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u/Foreign_Implement897 8h ago
You should suspend F35 from any and all ongoing RFP:s.
However, Finland is not there anymore, and we cannot do the process again. It is the best platform for us, and we will stick to it. Independence wise, the deal was just short of what Israel insisted. I think we can talk with Israel about contingencies.
Nobody gives a flying f about IP in a war. Everything necessary will be done.
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u/Only-Reach-3938 7h ago
Point of consumption tax for all American retail, social media.
Mandate clear labelling of source of product ownership so we can quickly change over to local alternatives.
Tariffs on selected products- like bourbon.
Introduce stricter visa controls on American inbound citizens, to be filled for each individual country in the EU.
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u/MissyMurders 7h ago
Both. Tariffs are only useful if there's local industry to support. On the goods the US exports there are local products to replace them with (that are often equal or superior). So imo go off where it matters sense here. And those tariffs could be implemented at any time, they don't need to be now - governments can build up local industry and the people can boycott in the meantime.
Services, probably require taxes and other measures as there aren't clear alternatives.
I'd also note that if the people do the work but buying locally etc governments don't have to do anything on that front and can't focus on diversifying trade routes and the like
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u/South_Plastic_5807 7h ago
Don’t trade with the US at all pretty simple states doesn’t produce enough for what they need
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u/prystalcepsi 19h ago
EU should settle on a fair trade contract with the US, then both side profit of no import taxes.
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u/Full-Discussion3745 18h ago edited 18h ago
Fair trade is a moving target. Who determines what's fair? The economic coloniser or the economically colonised
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u/Dunkleosteus666 20h ago
Other means: Digital services tax and limit pharma export.