Can you provide an example, especially for the EU?
From what I read, the average tariff applied by the EU is under 1%. Other comments say Trump has just divided imports by exports to calculate his tariff rates.
On a trade weighted basis it’s more like 3%-4%. The US is indeed lower on average, but marginally by like 1-2% on average.
But I think the concern is more key industries for the US like autos, tech (EU never ending fines are essentially tariffs), etc. where the disparity is more dramatic. But it’s still not a 20% difference.
Another concern is the devaluation of the Euro vs the dollar due to certain economic policies. Which again is a defacto tariff.
Anyways, my guess is this is a negotiating position since 20% seems excessive, but I could be wrong.
I don't get your irony. Yes EU companies are smaller, do the fines are proportionally smaller, but they are held up to the same standard and fined as well. It's not some hidden scheme to extract money from the US.
The limits are conveniently set so that the law doesn't apply to most EU companies. Only 4/25 included companies are EU (and 3/4 of those are porn, Booking.com isn't).
Edit: it's definitely worse if you go deeper into the rabbit hole. Sister legislature, Digital Markets Act:
Booking.com insisted on the fact that it is one of the only European companies that is a global success and that as they are not the most dominant actor in this sector, they should not be disincentivized while competing with bigger companies.
So yeah, "please only punish non-EU companies" definitely sounds like a trade barrier.
Treating fines on US companies as a tariff means we should also count Volkswagen $4.3 billion fine for Dieselgate as a hidden tariff. Do you agree with that?
But specifically when it comes to tech (which is overwhelmingly US companies), there is a massive imbalance. Tariffs are one mechanism by which that imbalance can be tilted.
"EU privacy regs are just laws you can choose to follow if you don't want to get fined!" Yes, and tariffs are laws you can choose to follow (by producing US market products in the US) if you don't want to get fined.
Again, US companies will also need to pay tariffs on imported goods, so it's not just targeted at EU companies. It's a tariff on geographic production.
I don't agree with much of this administrations policies, but to claim the EU hasn't created an imbalance in the way it extracts "fines" from US tech companies (and the incentives around that) doesn't reflect reality.
AGAIN, I don't agree that either the EU fines or US tariffs are a good idea. But the logic of using a tariff to correct this imbalance is sound.
Great example. Your government has decided they will levy additional fees for parking in geographic areas deemed undesirable. This is also what a tariff does for manufacturing (US firms also have to pay tariffs on imported goods).
Aligning incentives through financial penalties = forcing an entity to give you money until what you want happens. The key question here is intent - 1)which entity, 2)what's the scope of what you want to happen, 3)what happened before and 4)
can you do something about it if you're disadvantaged?
Tariffs and fines, for lack of better words, are both aligning incentives through financial penalties, but they are still different things.
The EU (governmental body) created laws to price in negative externalities and punish offenders until they correct their behavior. Fines will punish corps (private citizens) directly, with little collateral damage, until they stop being anti-competitive.
A fine forces a 1)small target to follow 2)a specific law and uses, like tariffs, financial penalties to achieve this. That law is a long term reflection of people's local culture and values, and it 4)can be appealed and judged. 3)A negative externality was priced in as a law and a fine.
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Right now, you have the Trump admin (gov body) applying tariffs to other countries (gov body) because they want manufacturing (private citizens) back in US soil. There is clear widespread collateral damage.
A tariff shapes the economic behavior of a 1)big target and, like fines, also uses financial penalties to achieves this. The desired economic outcome is a 2)trading strategy of a temporary administration. There is collateral damage. 4)There is no court, judge or 3rd party to appeal to, you as a government can only try to negotiate with the other government. 3) Two governments that were having mutually beneficial and consensual trading are now no longer doing so, there was no negative externality here, and while Trump may claim so it does not make it true that other countries were taking advantage of America. See trade balances considering products and services, as one example of lies trying to make it look like US was getting short changed by the world, it was not.
If tariffs and fines still feel like the same thing, it's only because 1)corporations have become government-sized and have achieved government-like powers; and 4) that 3rd party of the judicial branch seems to be more and more taken over by just the government itself, who might actually be a gov-sized and gov-powered corporation.
I mean, you are not presenting any robust or even reasonable arguments for your view. What you seem to be completely missing is intent. The EU privacy laws were not put in place to tariff US tech companies. The fact that US tech runs routinely afoul EU privacy laws and actually mostly gets away with it is entirely their choice. They could always abide by the rules and then they wouldn't get fined.
Listen I get this is wildly counter-narrative on HN (all tech legislation = good and EU = default good on this forum) so I will never win this argument.
But I’ve dealt closely with EU compliance on these matters, and the fines are absolutely levied selectively and in bad faith on areas that are impossible to comply with on the timelines provided or ever. They have absolutely turned into strategically punitive taxes on an industry that the EU has no answer to, so in effect, yes, they are tariffs.
I have also dealt with EU compliance, and I have never seen the EU act quickly on anything concerning business. It's a slow, bureaucratic institution.
With all due respect, when you are given years to comply, the problem is not that the timeline is impossible, but that your organization chooses to ignore the regulation.
If the same laws had been passed in the US, the company would have complied already.
Yes, fines sometimes appear levied selectively. Where do you draw the line though? Would you consider the tens of billions Volkswagen had to spent in the US to settle their emissions scandal as "tariffs"?
> Yep, and if you respect the tariff, you don't get fined. How hard is it?
Exactly, so we agree fines are not tariffs then?
> Just as EU companies have to abide by EU privacy regs, US firms also have to abide by US tariff regs.
Yes, also by nature, only importers pay tariffs, so most tarrifs will be paid by US firms, just like most EU fines are paid by EU companies. I don't see a disagreement here.
> "THE LAW IS THE LAW" is not an logical argument
It's not mine. I'm saying that if you don't commit a crime or by negligence let a crime happen, you won't get fined. Some criminals are never caught, and we can talk about two-tiered justice system, but just, I don't know... Don't commit crime? The risk to be fined will be 0 then.
This whole "the EU fining us for breaking EU law is a tariff" narrative is such BS. The big tech companies just don't like the privacy & consumer protection laws in the EU so now they're getting the US government to help them bully the EU into submission.
In my country, any fine > 135€ have to be given by a judge. If you want to discriminate between 'crime' and 'offense', be my guest, breaking the law get you fined, respect it, you'll be fine.
From what I read, the average tariff applied by the EU is under 1%. Other comments say Trump has just divided imports by exports to calculate his tariff rates.