“Europe holds a lot of cards. From trade to technology, to the size of our market. But this strength is also built on our readiness to take firm countermeasures. All instruments are on the table.”
In targeting U.S. services, Brussels could be thinking of bulge-bracket banks like J.P. Morgan or Bank of America, or tech players like Elon Musk’s social network X, search giant Google, or Amazon, the world’s largest online retailer.
“We are certainly not excluding a bigger response, a better response and an even more creative response through services, through [intellectual property rights],” a senior European Union official told reporters in mid-March.
The EU is a net exporter of automobiles, pharmaceuticals and food to the U.S. But it’s a net importer of services — and that gives it more leverage in a trade dispute. (Taking goods and services together, transatlantic trade is actually broadly in balance. The EU enjoys an overall surplus of just $50 billion, or about 3 percent of the $1.7 trillion in annual transatlantic commerce.)
“America’s tech giants, financial industry, and pharma companies have deep roots in Europe. Push too far, and Brussels could tighten the screws: digital levies on Silicon Valley, regulatory clamps on Wall Street, or taxes on U.S. pharma exports,” said Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations.
“America may wield the bigger stick, but Europe has plenty of sharp stones to throw.”
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