If US companies have a large unfair advantage such that domestic competitors are no longer able to compete, then wouldn't it make sense for governments around the world to ban or tariff US products and services?
If I was responsible for national economic policy, I would place this at the top of my non-emergency agenda. The world needs to act quick before their industries fail.
Most of the rest of the world is too heavily dependent on US digital services to tax them more heavily. From social media to hyperscaler's clouds the US is dominant and stuff will just stop working if they get taxed. There would be a huge pushback from businesses if their government increased the cost of things like AWS.
Edit: edit to say tax more heavily
Nick 30 ans is tired and wants someone else to pick up the slack for once.
20% VAT to begin with payed with heavily taxed money of mine.
Than on top of payed by provider of services to UK gov machine making 10usd sub be 10£ sub.
why digital services are so special you want more taxes?
Trump has ruined that, so now we'll be moving to build our own alternatives
https://apnews.com/article/icc-trump-sanctions-karim-khan-co...
Trump is using sanctions and started a trade war with Europe.
Europe would be mad to entrust their digital ecosystem to such a country
It's just chaotic. Chaos isn't good for business. What if Microsoft were instructed, on short notice, to block EU customers from using Entra over a trade dispute? If the identity provider of millions of European customers is suddenly unavailable, work grinds to halt. That's unacceptable.
Now you might say that sounds unrealistic - but would you have expected the American president to threaten an invasion of Danish territory? Or freaking Canada?
And even if the next administration turns out to be more "normal", we won't forget that American voters don't care about anyone but themselves - they wanted this. Twice. There is virtually no guarantee the same thing won't happen again in the future, and we all have seen how quickly fruitful business relations turned to shit over a pathetic narcissistic a-hole at the helm throwing temper tantrums.
Trusting the USA has proven to be a bad strategy, even for its closest allies. That won't change all too soon.
We are taking our time about it and not being consistent. For example some European governments are moving away from US cloud systems, but they are also pushing apps that require American devices to work. There is very little movement of the private sector away from the US so much of the economy economy remains dependent on the US. The end result will be government clouds not dependent on the US, but that can only be used using US controlled devices, and a private sector still just as dependent.
Mistral experience was as miserable as running local models btw.
Just in case you missed that class, taxes are determined by legislators
Didn’t he already lost that case? And, all the other countries know that.
Skilled engineers nowadays demand between southern and central European prices at the very least.
They def make less than in europe. You make very good money for working at Volkswagen on the line.
And China now also has software developers and even if they make the same amount, they are def also now a big player in the game and take parts of the cake.
Its also worth noting that st southern and central European labor costs they would still have an advantage over the US.
America mostly produces cheaper ag commodities than the EU but more expensive than South America. Deepseek is already a better search engine than Google. (Not sure if it does Google searches)
Travel the world it’s not American companies gaining market share. I would especially recommend trying Chinese AI or riding in a BYD car and judging for yourself.
It's a cost problem. If you want to try for a SOTA model, you're going to need to spend big time.
Germany spent ~$115B last year on it's defense, roughly 2% of it's GDP.
In contrast, ~$145B was spent last year just on AI infrastructure by Meta, and, well no one talks about Meta winning any AI races.
I think they have very little room for manoeuvre - companies like AWS or Microsoft can simply you are too cocky and we will shutdown infrastructure your country is running on if you don't bend the knee.
The US companies with access have a large unfair advantage over other US companies.
Imagine being Rivian if Tesla gets access, Rocket Lab or Blue Origin others if SpaceX gets access, most of SV if major tech companies get access, ... imagine being a startup.
I can only think of Russia that is decoupled from US at the moment and they are stuck with Putin that still lives with imperial mindset rather than actually being a rival to US
BTW EU will never have a "tech" industry in any meaningful size as long as US have access to EU markets, anyone who eventually got tech industry are those who blocked the US or were blocked by US.
So if US keeps its course, in a few years we may end up with fragmented markets with US blocked out because the US is very unpopular but the current politicians everywhere including in the EU are very pro-US actually hoping that current situation is just a glitch, which is not aligned with what the general population demands and as a result the next elections they will align with anti-Americans.
Europe isn't cooked because it lacks talent, there are untold smart capable people there, it's cooked because it built a social allergy to the very thing it needs most.
Maybe it is better at vibe coding or finding security flaws, but at how much is it sufficiently better to be worth paying the extra?
And either way no AI basically puts you back to where we were last year. US employees have always been far more productive, that’s nothing new.
This isn't an AI problem, it's a management issue. Why are you getting devs to build things that aren't going to generate revenue?
It’s not just us: where’s the revenue in the entire market? We can see all the public filings. There haven’t been any revenue gains. The only people making money from AI are the LLM providers. And even they are losing money. Even the biggest tech companies are limiting token spend. At best the tech is a new cost just to maintain parity, and I think most businesses look at it as a way to cut dev costs (trading for token spend). I think they will learn that it’s less of a win than they hoped. If a dev was spending 50% of their time coding, and you reduce that to 10% - that’s a big change but it isn’t really making you more because it’s all that time we hate in meetings, understanding customer needs, etc, that make us money.
Identifying the next few things to improve the product is hard work, with market investigation, competitive analysis, synthesizing user feedback... some of this gets faster with LLMs, certainly.
I think most tech companies haven't figured out how to rebalance product to engineering to ensure engineering teams are doing work that grows the business funnel rather than expending tokens on other work.
People claim this, but it doesn't seem to be the case at all. We have multiple ongoing conflicts between countries currently, and we're not seeing huge gains from those with more access to AI.
Previously US used rebel groups to throw governments in other countries that are not US friendly. In the future I can see they can just start chaos by attacking banking systems, energy infrastructure or any other important modern infrastructure until that country falls in line with US
Current AI was science fiction 5 years ago. But, you're entitled to your opinion, no matter how ignorant it is
[1] https://mcraenglish.weebly.com/uploads/1/5/8/7/15876062/the_...
Even in the European case, Europe would lose much more than the US would if they closed their markets. Plus, a lot of Europe is either very close to breaking point and unwilling to change (Italy), or rapidly worsening into a crash, and unwilling to change (France).
It's Europe that is dependent on a large trade surplus with the rest of the world, financed by dollar loans to 3rd world countries. Now China is taking away their trade surplus, even directly (meaning Europe has a massive trade deficit to China), and indirectly (replacing demand for European goods, famously cars, everywhere). This is causing large-scale job losses in Europe as well as total disaster for government finances across the block, finances that were unhealthy to begin with.
Now Europe and China are unwilling to lend to the rest of the world (because initially that would make very rich Europeans/the CCP a little bit poorer, by raising inflation quite a bit, thereby raising interest rates, which will move government finances from disaster to catastrophe), so if these money flows are to keep going, either the US MUST export to China, which is not happening, or EU and/or China must loan several times their own GDP to the third world, or the EU and/or China must massively increase their dollar holdings (which will, of course, inflate the Euro and Renminbi something awful whichever way it goes). But either WILL happen, because a crash will do that too. Which is what people mean when they say the worldwide system is on a crash course.
If the US doesn't reverse course soon, I think we'll start seeing large-scale closure of international markets to US companies very soon. Even with US retaliation, there is no other option.
It's really sad seeing how little so many of us Europeans understand the situation. America and China hold all the cards, Europe holds none. It makes very little that is both unique and strategic. Decades of left wing economic policies are coming home to roost and there's no way to turn the ship around now.
that def will hurt.
But we still have a lot of capital left, so plenty of ways to adress the elephant in the room. Its just very weird that the current CDU doesn't has any real good ideas.
USA has a certain amount of hands especially IT but otherwise? China runs circles around Europe and USA for everything else.
Btw. CDU was in power for 16 years and is more right wing than center. If you say left wing in sense of not protecting our own markets, i think this was accepted globally.
USA also can't make things anymore.
If no-one comes up with the general notion of a min of like 60% home made, none of it matters because rebuilding this will take a lot of time and money.
And even with a chip factory in USA, they still import most and automate as much as possible.
This might reduce the pressure on USA Loans but will not help the USA people themselves. They will just continue seeing a bigger and bigger split between poor and rich.
So from a wording point of view: generic term still would be CDU is right.
Yawn. If you look at actual production in industry data we're at the peak or close to.
A lot of this yapping is (outside of just boring political droning) due to conflating relative stagnation with "deindustrialization" lol and looking purely at individual countries like Germany, not realizing the most of the recent growth is east and south of it.
Indeed. This is the same argument people make about oil: it's at (or near) it's highest level ever! So things must be good! And that's not exactly true.
Even though, for oil, there's barely any people who see how bad things are (I guess the top of the US government sort of demands you don't if you work for the US government). But what matters is the change.
If things even just stay the same, efficiency improvements will lead to massive job losses, and in practice "stay the same" still means some companies suffer and others gain. The suffering companies are the employment giants, the gaining companies are the "lights out" factories, to an approximation. Things must go up, it's "the derivative" that matters, so to speak.
That's why it's such a massive deal that the derivative for Europe's industry (even with the massive military investment) ... very close to zero. In other words: the job losses will continue even under Germany's massive investment plan.
You could say they're not beating inflation, but that isn't exactly accurate. Or it isn't the problem.
The normal USA citicen can't afford a car anymore. Either they make it a lot cheaper over there or they have to continue pressue the USA Citicents to accept that they are not allowed to buy cheap China products.
It will be quitei nteresting to see if we will see a global rebalancing of manufactoring and co around the globe for USA, Europe and China or a overall change in system from pure capitalism to something else.
Or the big players start to reinvest into countries again to have customers who can actually afford it again.
In other words, the problem of "The normal USA citizen can't afford a car anymore" can be understood in a different way. That can be fixed, by paying people less (yes, less, really, think about it)
The US can drop it's imports and do essentially everything itself.
Right now people can't afford a car because the US is so equal, meaning they can't compete with labor in India or ... But you could "fix" that, by creating more inequality in the US (do what we effectively do now, worldwide, but within the US. Forbid people immigrating from California to New York. Move all banks to New York, build factories in California. Pay people in California 20% what they make in New York for the same job), and production will move back to the US.
And if that offends you, please understand that's exactly what we're doing now. Just replace California and New York with India or China and New York with, well New York, or Washington, and that's exactly the system we have. That's the system the EU is trying to create in the EU.
Doesn't work that way for exports (EU, or China, or to a lesser extent, India). The EU is an export block that's rich getting out competed by export blocks that are poor ... Now THAT is a difficult problem to solve. Not that EU politicians are even trying.
The US is not doing better because US politicians are better than EU ones. They just have a much easier problem to solve. And, of course, both US and EU politicians are failing, but the consequences are much bigger in the EU.
For example, the EU is in fact making it harder to immigrate WITHIN the block, despite "free movement", and is creating massive differences in pay for the same work, which is apparently what socialism stands for:
Typical after-tax pay for supermarket cashier:
Netherlands: 2550 euro (after tax), for 36 hours of work ~ 15 euro/hour
Greece: 1050 euro (after tax), for 40 hours of work ~ 6 euro/hour
Oh and that's not where it ends. You get way more social protection and medical in the Netherlands ... for paying less in tax. The EU is purposefully creating inequality to solve the problem of rich Dutch people not getting richer fast enough. It's only within the same country that there is less inequality in the EU. And, of course, the EU has been making it worse, not better, for about 18 years now. They're not about to stop. The US hasn't even decently started doing this yet.
I assume it was a mix of exports and a continuesly growing population keeping this system alive for a long time.
If you know reduce the avg salary down to 1/3, you will get cheaper cars (if you even still need people to make cars, relevant amount of people), but still no one can afford it.
You need to get down from the current price point of 50k down to what? 20k?
Car manufactorers will have to shrink down production, reduce laber numbers, reduce salaries and the avg us american will have to downsize its consumption by a lot.
The USAmericans are at least not taking social security and health care as a human right, after all they don't know it better mh?
The second part played an enormous role too.
So you have to be decently wealthy now to migrate legally in the EU, going up. Which of course achieves exactly what's "needed": poor Greeks/... cannot get away from low Greek wages by simply driving to the Netherlands. Doesn't work. Wage disparities and inequality can grow and grow and grow.
Not that this is going even remotely fast enough for the EU. There is talk now about a "2-speed" EU. Meaning people from the periphery would get less rights (especially when it comes to how much weight their votes carry, but also when it comes to moving)
Companies, by contrast, can easily move to find the cheaper labor. Because, of course they can.
And, because of course, people who "cheat" by not taking benefits or jobs, just making a bit on the side and living in caravans to avoid everything, big example being the Roma, are being hunted by the authorities in 50 different ways. Problem is that mostly they're not doing much of anything wrong, so methods like forcing them through stealing their kids are used (sorry, of course I mean "protecting the kids" through youth services, excuse me, I misspoke. Protecting kids. Not kidnapping kids to pressure the parents).
Oh and it is TOTALLY unreasonable that these people are teaching their kids to directly use violence against anyone come to "help" from the state. Totally, completely, 100% unreasonable. What are you going to do though? When youth services was allowed to use violence against the kids, they massively abused that. For money. For sex. Shooting (yes, really, with a gun) kids slowly leaving the premises. Leaving "troubled" kids in an isolation cell until they commit suicide. Not called that, of course. You'd be surprised how many euphemisms youth services have for both isolation cells for children and for suicides happening on (or immediately after) their watch. Things like this[1] for example have never been named isolation cells, which is what they are, but, loosely translated "time-out room", "separation from everything", "low stimulation room", "TAVA room", "separation from incitement room", "cool down room", "sensory-friendly room", "seclusion room", "safe space" (NEVER trust or go with anyone from youth services talking about safe spaces, unless you're at least 25, and even then) and I'm sure I haven't covered even half of them)
It’s so easy to argue on putting tariff on US tech, but we forget how much Europeans depend on it and it would be like shooting one’s own foot.
One could argue that over the time EU can build their own infrastructure and alternative, but who is going to invest for it? The governments? With tax payers money? And who is going to build it? EU is one of the fastest aging continent in the world and what can they offer to attract young talent?
aws et all are just extracting rent. we all know this.
telcos have some ownership of the android firmware they distribute, and could easily spin up and fund alternatives like replicant or even go full partnership with Chinese versions.
simply moving email providers from Microsoft would make threeletter agencies work much more difficult, and it's a 2min dns change.
any way you look at it, the impact would be positive. i don't think your example is the example you think it is. like trump, you're ignoring agency to every other player in the systems and ignoring some obvious consequences.
Forget about phones, all the companies that uses RDS would lose their data and that would be catastrophic.
Oh, European billionnaires and incumbent telecoms would love to. As soon as they get enough government concessions and guarantees. Who exactly? The ALDI family. Xavier Niel.
At least for people working in IT this is the fastest way to answer the question "how can we make it even worse?". Especially European incumbent telecoms. They're the answer to this question "do people sometime quit their job, in Europe, through suicide?". Yes, yes they do.
I'm pretty sure they are really looking forward to pocket billions of tax payers money. If they are so eager, why wait for the government? just go for it like the US counterparts.
Everything is going according to plan. When we have majority, we'll move the companies to Norway, but don't tell anyone, this is supposed to be a secret. /s
I can't find it right now but I read news just a few month ago that the EU is working on making it easier to invest into EU similiar to how the Petrodollar currently works.
But if the deindustrialization of germany/EU continues as it currently does and US implodes and China has also issues, we will see how the new world order will look like.
China is for sure more resiliant though. The living standards were never as high as what we as germans are used to and they dont demonstrate.
In the USA people have guns and civil issues and a hard divide between city and country sides.
But as Europe/Germany we should be able to increase our bonds right? Investing into solar/energy transformation; Doesn't matter short term how this will end.
And if AI continues as it does with robotics, we might even see in 50-100 years a complete change in system?
USA Bonds are exploding so they might have overplayed their hand already.