US President Donald Trump’s threat to impose tariffs on the EU could prove highly damaging for the online advertising industry following claims that Brussels could target tech giants with a new weapon to impose restrictions on trade.
The so-called “anti-coercion instrument”, which has been dubbed the “bazooka” by some EU officials, is likely to be aimed firmly at Alphabet (Google) and Meta platforms (Facebook and Instagram) as well as Amazon, Apple and Microsoft, which dominate the online advertising market.
According to GroupM’s recent This Year, Next Year Report, in 2025 pure-play digital advertising will account for 72.9% of total ad revenue of $1.1 trillion, with the lion’s share going direct to the platforms. Any disruption in the operations of the tech giants could have widespread consequences for advertisers.
The FT cites one European Commission official who said: “All options are on the table” and pointed to the ACI as the toughest response available without breaching international law.
The tool, which came into force in 2023 and was deployed as a deterrent against China, allows the EU’s executive arm to impose restrictions on trade in services if it determines that a country is using tariffs on goods to force changes in policy.
While the UK will not be directly affected due to Brexit, any businesses with pan-European operations will fall under any potential action.
Trump’s threat to use tariffs to force Denmark to hand over Greenland and to press the EU to drop enforcement action against US tech companies would qualify, officials said.
The “bazooka” allows the bloc to select from a wide range of retaliatory measures, such as revoking the protection of intellectual property rights or commercial exploitation, for example, software downloads and streaming services.
It also allows the EU to block foreign direct investment or restrict market access for banking, insurance and other financial services groups.
Last week, Trump said he would “absolutely” levy tariffs on the EU, ironically citing the Commission’s previous action against US tech companies as well as its large trade deficit in goods, although exact details have yet to be revealed.
EU trade ministers met on Tuesday in Warsaw to discuss the threats and, according to the FT, officials briefed on the closed-door discussions said the majority expressed support for punitive action if necessary.
Trade commissioner Maroš Šefčovič reportedly said he wanted to negotiate a way to avoid tariffs but added: “If we are hit, we will react firmly.”
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