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Comment by FirmwareBurner | Hacker News Reader

>The proposed target products include industrial and agricultural products, such as steel and aluminium, textiles, home appliances, plastics, poultry, beef, eggs, dairy, sugar and vegetables.

Why tariff such low margin US goods and not high margin US services like software? US doesn't export much goods, as most of the bulk of their economy is tech, finance and services not exporting cheap merch in shipping crates like Asia. How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?

How is a tarif on US textiles or eggs supposed to be a deterrent? When was the last time you saw US eggs or clothes in the EU shelves? Even in the US, less than 10% of the textiles are domestically made.

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The list isn't given, but I've heard in both the Canada and China cases the tariffs are targeted at "red state" products.

Original press release: https://ec.europa.eu/commission/presscorner/detail/en/qanda_...

This seems to be the list: https://circabc.europa.eu/ui/group/e9d50ad8-e41f-4379-839a-f...

Edit: a skim of the list suggests it's pretty broad. Agricultural products, wood, clothing, wine, polythene. There's an insane number of very slightly different product categories, no wonder compliance is so expensive.

That doesn't answer my question: "Why tariff such low margin US goods " that aren't major imports in the EU anyway or major parts of the US economy?

Them being red state products is a weak argument that sees no base of argument or success.

How can you even tariff multinational companies where nothing is transferred between one country to another. Although I think they could tax the company on moving the money out of country. So e.g. whatever money google got from ads from European country can only be spent in Europe else they face heavy tariff.

Republicans do not care about blue states economies and prosperity. They are happy when liberals suffer and would be happy engineering it. They might care if red states economy goes down, because that harms their election chances.

Red states voted for this, because they wanted other people to suffer and thought it will bring them prosperity. It makes sense to target that part of america.

> Them being red state products is a weak argument that sees no base of argument or success.

Because Trump (presumably) listens to Rep Senators/Congresspeople. If he doesn't, then making his voters worse off is a good way to get them to complain.

That's the logic anyway, who knows if it'll work.

Tariffs are bad for anyone who needs to import, which is why the US stock market doesn't like the US having tariffs; the EU doesn't want to raise them either because EU doesn't want to damage the parts of its own economy dependent on imports, it's only raising them at all because it wants to put political pressure on the US to prevent damage to those parts of its economy dependent on exports.

By focussing tariffs on only the places that politically support Trump, they get the political impact with the smallest currently-possible negative side-effects.

> How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?

What would be the plan exactly here? These services are being sold by European-based companies and being served from European territory (eg AWS Frankfurt). There’s no import happening here.

In general it makes sense to tariff something that you can replace. E.g. tariff American eggs, so suddenly it makes more sense to import them from Peru.

If you put a 100% import tax on Windows license, the only result is that the EU customers are now paying double the price for Windows. It’s very unlikely it’ll result in people switching to an alternative system.

Same with AWS - even if you’d tariff all American cloud companies, what result would you expect? Sure, in X years maybe you’d grow an EU cloud company, but until then you’d make every European business using cloud very uncompetitive globally.

You use tariffs to prop up the companies you already have. You could put “tariffs” on Apple Music, so people would move to European Spotify.

> You use tariffs to prop up the companies you already have. You could put “tariffs” on Apple Music, so people would move to European Spotify.

Not just the music providers, you could go after American IP and effectively stop international payments to American movie/music/film providers. You could bootstrap the music part from Spotify - i.e. just prohibit Spotify from remitting any licensing fees for American-owned IP. Like when Antigua had the WTO ruling around piracy: https://torrentfreak.com/antiguas-legal-pirate-site-authoriz...

How do you tariff a software service ? Tariffs are applied at import ? Are you paying US software if its hosted in EU datacenter by EU subsidiary ? Or if software licence is sold by EU subsidiary ? The concept makes no sense to me.

Toll-wires

Exactly what I was thinking. We need a great firewall of EU that is charging for packets crossing the Atlantic

Of course, what is needed to preserve democracy and freedom is *checks notes* ideas from totalitarian dictatorships.

Kind of like Vat is applied now - you’re from a given country, you pay more per month for a subscription

But software/services are sold by EU companies (subsidiary)

It's a nice accounting trick, but that's all it is.

If it's a subsidiary, there's a way to assosiate with the parent company.

Sure, but then the other side can do the same.

VW producing cars in their factories in the USA? Put a tariff on these cars as the parent company is based in Europe.

It’s really not that simple, as e.g. big tech has their development centering the EU as well - so these products are at least partially produced here.

If you want to write some custom rules, sure, but then you’re really opening a pandora box. Technically you could just add 100% tax just on vehicles that have Tesla in their name. Try making such moves and look as investors immediately drop any trust in your countries political system (and currency).

>Sure, but then the other side can do the same

That's expected. The other side already imposes some tarrifs (as did the EU - it's BS that Trump's tarrifs to EU are some unprecedented move, the EU already had tarrifs of US cars and other products).

The problem we're discussing (at least according to a parent comment) is that the US has a lot more "digital services" products than actual physical products where EU tarrifs are currently applied.

So, what's discussed is how to tax those (and how to sidestep "but it's a European subsidiary, not a US company" hurdle).

So, sure the US can counter EU digital services by also using the same sidestepping. But it's not like EU has many such worth talking about. All the big players are from the US (Facebook, Google, Amazon, MS, etc).

Software companies just open subsidiaries in the target country and sell services through the subsidiaries. The only thing this does is make it harder to move profit to the home country (and there are ways sound this) and add a lot of accounting work

What do you mean by that? That’s not how VAT works.

It is how it works. Go to any website with saas. If you mark eu as your country, you will be charged extra for vat.

Or, going the other way - if you’re an EU company but your software users are outside EU, you don’t need to charge them VAT.

When I was running Appcodes, I didn’t want to ask about the country directly, so I got an official opinion from Polish IRS that if I store geolocated IP address of registration and browser timezone for additional confirmation, it’s a good enough proof to not charge vat to consumers outside EU.

something I learned recently: payments to foreign bank accounts in Brazil have an automatic 25% tax imposed regardless of the purpose of the transfer. This seems to applied to companies of a certain size, or moving certain volume of transfer, but still.

>How do you tariff a software service ? Tariffs are applied at import ? Are you paying US software if its hosted in EU datacenter by EU subsidiary?

If there's a political will and your position is strong enough, a scheme / legal formula is trivial to find.

Even something like "5% of what you make off showing ads to European users" would be enough.

Can add any arbitrary qualifier like "if your main base of operations is outside the EU" - which could hold whether you're a EU subsidiary or not.

I don't agree that it's "trivial". The devil will be in the detail and could drag out in the courts depending on the language definitions. Quite apart from the fact that anything dreamt up at short notice is going to have shortcomings, tariffs are much easier impose when you're transporting physical objects across physical borders.

That still does not make sense.

Do you block your own citizens from accessing sites hosted in foreign countries if those sites/companies don’t comply with your foreign law?

Do you arrest your citizens for accessing those sites anyways or use VPNs to circumvent blocking?

And there are dozens of other questions that raises, but you’re talking about what most people describe as totalitarian states.

>Do you block your own citizens from accessing sites hosted in foreign countries if those sites/companies don’t comply with your foreign law?

Sure happens, including in the EU. There are some european anti-copyright-theft laws for example, and local ISPs are forced to block some warez/pirated ebook etc websites (you can bypass via VPN, but the "official" gateways/DNS block them).

>Do you arrest your citizens for accessing those sites anyways or use VPNs to circumvent blocking?

Not at the moment. And the logistics do not make it very easy (can't track each individual). But you can sure fine any commercial company accessing such sites, prohibit state infrastructure and any company doing work with your state from using them, etc.

I'm not sure what the objection is. Do you mean "does not make sense" from a democratic/open society standpoint (as if european countries are a bastion of that, and such moves are beneath the legislators)? Or that it "does not make sense" from a technical aspect? For the latter, when there's a will, there's a way.

That's not a tariff that's a tax. If you start taxing foreign entities different from local you are violating all sorts of treaties and depending on how the laws are written it could be unconstitutional discrimination (once you start talking about foreign ownership etc.)

>That's not a tariff that's a tax.

A tarrif is a tax. Doesn't have to be on physical products or be applied at the customs office.

>If you start taxing foreign entities different from local you are violating all sorts of treaties and depending on how the laws are written it could be unconstitutional discrimination (once you start talking about foreign ownership etc.)

Nothing that couldn't be overcome. Those treaties didn't exist at one point, and wont exist on another point.

That's like saying we should start supplying Ukraine with nukes because we're already supplying them weapons. Logically they are both weapons, but in real world one of those options ends with a nuclear armageddon.

Implementing anti US tax is escalating the tarrif posturing to a full blown trade war.

I'm reminded of how the EU had to sue Ireland to get them to properly enforce their own tax rules against Apple.

Yeah, fair.

I will note (as an Irish person who's followed this case), that it wasn't about this specific case (and the first deal was in 1991, when Apple was not in a good place) rather it was to demonstrate to multinationals that we'd support them if the EU decided there was an issue.

It was a signalling thing rather than a principles thing.

Also note that Apple last got that deal in 2007, before the iPhone was launched.

1) Because the purpose is not really to make money from tariffs (only trump think that is a thing). The purpose is to encourage people to buy replacements from other countries/your own country/union. People arent going to switch from AWS to Hetzner just because a temporary tariff. But they could easily buy steel/corn/etc from another place while tariffs are in place

2)Software is very hard to tariff because often you can set up a company inside the other country and sell the software from there. And then it never crosses the border. Same can't be done with beef. It has to cross a border.

The US is a massive meat exporter [0] and has put a lot of energy into getting import deals etc. with partner countries. The most famous one is with Japan, but the EU probably has it's range of agreements.

Taxing US meat is hitting right where it needs to, with very limited impact on he local population. France for instance will just increase it's domestic sales, and other EU countries can also turn to neighbor to get their meat.

Software and electronics are a different beast and a lot more impacting in that regard.

[0] https://www.mda.state.mn.us/sites/default/files/inline-files...

> How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?

Microsoft, Apple and Amazon all sell from EU countries, not US. My AWS and Azure Bills are EU based, not US based...

If a steel company has a EU subsidiary it doesn't absolve it from import tariffs. Same with everything else.

When AWS has its HQ and development in the EU it's another matter, but so far it's just a bunch of salespeople.

How do you calculate the proportion of value coming from:

- data centers operated in the EU

- R&D done in the Europe (almost all major tech companies employ lots of developers etc. across Europe)

What if European companies have offices and hire workers in the US? Do you tax them too?

What EU could do that is double down and regulating US tech companies and charging them even more multi-billion “fines”.

What proportion of it would be able to autonomously operate if North America disappears tomorrow? Zero. That means 100% of value comes from the USA.

This. The IP comes from the US and most of the profits go to the US.

So “tariffs” wouldn’t make much sense then and would be paid entirely by European businesses and consumers?

Tariffs are always paid by the businesses and consumers. That said, service hosting is a solved problem in 2025 and is mostly a matter of capital allocation. If it comes to a trade war, it's an easy way to eliminate overseas competition that dominates the established market in favor of local actors.

Well obviously but the idea is that if tariffs achieve their intended purpose (i.e. increase local production and competitiveness) those costs incurred by the consumers are at least partially compensated through higher wages.

Because EU is weak and no real leverage.

There is a lot of political posturing but it happens precisely because there not much to be done without hurting EU citizens tremendously.

The EU is way too dependent on everyone else and is now going to pay the price. Maybe we will get rid of the bureaucrats.

Tariffs on products and services with no realistic alternatives in the short term would simply be a tax on your own businesses and citizens. You don't want to do that. It's better to impose tariffs on something inconsequential. Something where alternatives exist and you wouldn't mind if that part of trade just stopped completely.

Without any evidence or education or experience whatsoever I would assume they target swing states and key voter demographics?

They found exactly $26B worth of goods.

Also afaik the only way to implement tariffs on packets is through lawyers attacking an arbitrary set of big enough players that aren't sufficiently globalized that they would be taxing the EU's own productivity, and any attempt to levy that inherently appears selective and thus resembles cronyism.

That said, now that I've explained how irrational it is, I could totally see trump doing that as he will seemingly take any form of pretext to enact cronyism.

> How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?

+ Apple products, + google (& their ads), + Facebook (& their ads), + Netflix, + all Hollywood film and television output.

Funnily enough all the money everyone outside the US spends on these things is not included in the "trade deficit" that is "the problem".

> Apple products

Which would effectively have to be implemented as a tariff on products manufactured in China and Taiwan and imported and sold by an Irish company.

It’s impossible to do that without some massive legal changes which are politically infeasible and would also hurt European economy.

Tax the repatriation of the profits to the US and/or the "royalty payments" paid to wipe out any profits that would arrise in the Irish company.

If the US sees the world as zero sum, as they are entitled to, it is time we stopped accomadating a globalised tax system.

> Tax the repatriation of the profits to the US and/or the "royalty payments" paid to wipe out any profits that would arrise in the Irish company.

This doesn't happen anymore (the royalty payments), now the revenue is booked in Ireland, with consequent impacts on their tax collection.

It's also because it's low impact. How much textile or eggs are really getting exported from the US to the EU? The EU isn't dumb, they don't want to sabotage their economy just to retaliate.

Can you tariff software? How exactly would that work? Does a legal framework and system which would allow that even exist?

How do you determine where exactly is software “manufactured”?

"Tariff" is probably not quite the right mechanism because there's no importer to really pay at the time the good is imported.

But the government in Canada passed a federal sales tax holiday that applied to a very arbitrary selection of products for a couple months here.

It was kind of a nightmare for small businesses, but I expect a similar legal framework would work for software. If you sell software, you're now obligated to remit 25% of the sales revenue to the gov unless the software is on a list of "Canadian software" as determined by some team of bureaucrats.

please don’t make my aws bill even higher than it already is :/

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