The Minister for Finance has said that the Government would not support the use of Digital Sales Taxes (DSTs) on US big tech as a countermeasure to resolve the current impasse between the European Union and the United States over trade tariffs.
Paschal Donohoe was speaking in Warsaw on the second day of an EU finance ministers meeting.
“We want to ensure that the European Union can reach a united view on a set of measures that gets the balance right between responding back to what the United States has done, but not causing undue harm and undue difficulty to our economy and the European economy,” Mr Donohoe said.
“While we understand that all measures need to be assessed, our view is that DSTs would have a harmful effect on our economy,” he added.
The minster said that a de-escalation was needed and that an agreement must be found “instead of the trade tension and the trade difficulty that we are currently confronting”.
On Thursday, European Commission President Ursula von der Leyen told The Financial Times newspaper that the EU would not rule out imposing levies on the digital advertising revenues of US big tech groups operating in the bloc.
This measure would work as a tariff and would be applied across the single market, wrote the newspaper.
Ireland has not previously supported the use of digital sales taxes, which are imposed by member states.
DSTs are taxes imposed by countries on the revenues of tech companies operating in their markets and normally cover digital advertising.
A number of EU member states, including Denmark, Portugal and Poland already operate DSTs, taxing advertising sales on digital platforms.
Mr Donohoe said he was confident that the US administration’s temporary suspension of targeted tariffs for 90 days provides enough time to resolve the current trade dispute.
“We will spare no effort in making the best possible use of those 90 days,” he said.
On Monday, Europe Commissioner for Trade Maroš Šefčovič will hold talks in Washington with US officials in a bid to reach a deal over the tariffs dispute and repair transatlantic trade ties.
Today’s discussions between EU finance ministers in Warsaw revolve around how the bloc can finance increased defence spending, following approval last month by all member states of the European Commission’s ReArm Europe proposal.
The proposal plans to boost defence spending across the EU by €800bn over the next four years and includes a plan to raise €150bn in private capital on the markets for defence investments, which would be backed by the EU budget.
Mr Donohoe said he was confident that the EU could “meet the spending needs that we have in ensuring that Europe can be safer in the future”.
What is the EU’s trade ‘bazooka’ and what impact would it have?
Warning against taxing US tech firms as part of countermeasures
The former chief executive of the IDA has warned against using anti-coercion instruments such as taxing US tech firms as part of the EU’s countermeasures to President Donald Trump’s tariffs.
Speaking on RTÉ’s The Business, Global Head of Industry at Grant Thornton Martin Shanahan said that he believed the EU does not want to use those type of measures, but that the EU would like to be able to use them as a negotiating tactic.
Mr Shanahan said if measures like that were deployed, it would be mean things have got “pretty bad”.
He said it is up to all the players in the negotiations to de-escalate rather than escalate tensions, and warned how bad things could get for Ireland’s economy.
However, he acknowledged there are some within the union who feel US tech companies should be further regulated and taxed more and who would favour the use of anti-coercion measures.
