Why is the EU wary of attacking American services in the trade conflict

Since trade tensions with the US escalated last year, the EU has consistently refrained from targeting American services, despite the US's significant trade share in these sectors, the report said. Euronews.

As EU leaders prepare to meet Thursday night to discuss their response to President Donald Trump's tariff threats on Greenland, the question is back on the table - why are services a no-go?

Officials say the package of countermeasures prepared last year, which focuses on goods, is already seen as a first line of response in case U.S. threats materialize. Targeting services, by contrast, is seen as a step that could trigger a sharper escalation.

This warning comes despite the fact that the US reported a trade surplus of €148,0 billion in services with the EU in 2024, meaning that retaliatory measures against sectors such as financial services or big tech companies would likely be much more painful for Washington, which is heavily dependent on access to the EU's 450 million consumers.

During a meeting of EU ambassadors on Sunday, France, Germany and Spain raised the possibility of using the EU's Anti-Coercion Instrument, designed to counter economic pressure from third countries.

Considered a last resort, this would allow the EU to restrict licenses for American services or intellectual property rights.

A tax on digital advertising revenue was also proposed last year by European Commission President Ursula von der Leyen during the previous tariff dispute. Such a move would hit tech groups such as Meta, Google and Facebook, which generate the bulk of their revenue from digital advertising.

Yet, attacks on services are considered far riskier than attacks on goods.

Europe's dependence on American services

"Tapping services has greater potential, but is less common than imposing tariffs on goods and can therefore be seen as an escalation. Technology and financial companies are powerful and have the support of President Trump. Hitting any of them would be a drastic action and would create a lot of noise," explains Varg Folkman, an expert at the European Policy Center.

European officials also fear a full-scale trade war that would ultimately raise prices for EU consumers, a risk compounded by Europe's reliance on American companies, with few domestic alternatives available.

"If you exclude American cloud providers or banking services, the EU doesn't necessarily have options to step in and fill the vacuum left by them," says Folkman.

Many major services used in the EU, including payment systems such as Visa and Mastercard, are based in the US. The same is true for most cloud service providers, with Microsoft and Amazon Web Services dominating.

In addition to trade protection tools, Brussels still has competition policy and digital regulation at its disposal. Regulations such as the Digital Markets Act and the Digital Services Act allow the Commission to fine big tech companies for stifling competition or failing to tackle illegal content and disinformation.

"The EU could really tighten the rules. We know that the Commission is investigating X right now. It could push for this investigation, for it to take a more serious approach. Brussels could really try to enforce outstanding fines against the US tech giants," adds Folkman.

However, after Trump had already criticized EU regulators for enforcing technology rules, the Commission repeatedly insisted that its approach was non-discriminatory and applied equally to companies from all countries and was not specifically targeted at American firms.