The ink is barely dry on US President Donald Trump’s latest tariff decree, but he’s already threatened to impose more duties on the EU over its Google fine last week.
Elsewhere, new UK prime minister Andy Burnham is set to meet Ukrainian leader Volodymyr Zelenskyy, while the UK could be shut out of an EU tech fund.
Trump threatens EU over digital tax
Donald Trump is marking a year of the EU-US trade deal by posing a different challenge to transatlantic commercial relations, threatening to open an investigation into Brussels’ Digital Markets Act (DMA).
The DMA gives Brussels the authority to impose sizable fines on tech companies which operate in the EU. Last week Brussels announced an €890m fine on Google for anti-competitive practices pertaining to its search and App Store functions.
“The EU will pay a very big price for this illegal and highly unethical conduct, which I have consistently warned them about”, Trump wrote in a post on his social media site on Friday (24 July), also threatening to place a “a substantial TARIFF” on the bloc if it doesn’t reverse Google’s penalty.
On announcing the fine, EU executive vice-president and competition chief Teresa Ribera, said:
“The best products should succeed because they're better, not because they're owned by the company running the search engine.”
The action plunged transatlantic relations into a new level of uncertainty, following confirmation last week that the new US 301 Section tariffs of between 10% and 12.5% would honour the terms of the EU-US trade deal agreed last year.
The so-called Turnberry deal, named after the Trump-owned Scottish golf course where the agreement was made, caps US tariffs on EU imports at 15%.
EU-UK tech fund challenges
The UK’s bid to enter an EU tech fund designed to develop promising home-grown start-ups has run into difficulty, with suggestions that some member states want to use participation as leverage ahead of the EU-UK summit, now slated for the autumn, the FT reports.
An EU diplomat told the publication that “three or four” member states have questioned what could be gained by allowing UK access to the fund, “arguing there needs to be a ‘quid pro quo’”.
Additionally, objections were raised by France, with another official saying Paris was asking why “are we gifting the British opportunities when we need to ensure this initiative is an EU initiative for the benefit of EU member states”.
Earlier this year, talks surrounding the UK’s participation in an EU-wide defence fund, Safe, broke down over the UK’s refusal to pay over a €6bn entry fee requested by Brussels.
At an event held in June to mark the tenth anniversary of the UK’s EU referendum, Institute for Government senior fellow Jill Rutter said that the high Safe entry fees were also spearheaded by France.
The European Commissioner for starts-ups, research and innovation, Ekaterina Zaharieva, had spoken positively about the UK contributing to the fund in May, with the UK agreeing to provide £150m.
Burnham’s second week in power
Although Parliament isn’t sitting, the new prime minister still has a lot on his in-tray.
This week, he’ll be meeting Ukrainian President Volodymyr Zelenskyy for the first time as the two tour a naval base this afternoon. The meeting coincides with the UK signing over intellectual property enabling Ukraine to mass produce Stone Cloak signal jammers.
Burnham’s first major interview as PM, sitting across from the BBC’s Laura Kuenssberg yesterday (26 July), saw him set out more on his approach to relations with the US.
Building on speculation that he will depart from Sir Keir Starmer’s appeasement strategy with the notoriously volatile world leader, when Kuenssberg asked if he would call out Trump, he replied:
“You have to defend your own national interest before anything else. That's what you're required to do if you're to do this job properly.”
He also sought to put an end to questioning about his mandate for change, telling Kuenssberg that there will be “no early general election”, and that he will honour the Labour manifesto set out ahead of the 2024 election.
Elsewhere in the headlines
· A fresh round of talks between the US and Iran has been announced, with a cessation of military strikes from both sides. The price of oil fell to US$91 per barrel, having once again hit $100 last week
· Politico has an in-depth feature exploring the exemptions pertaining to the latest round of tariffs. These included niche exports the US would struggle to source from other nations and key agriculture products such as coffee and cocoa beans that would have an inflationary impact on the price of groceries.
· The Guardian reports that a Department for Transport report found that a third Heathrow runway would lead to over 15,000 job losses across the UK’s regional airports by 2050, including 9,500 at Birmingham airport alone
Also coming up this week
Monday: Assembly elections in Pakistan regions Azad Jammu and Kashmir
Tuesday: Booker Prize longlist announced
Wednesday: US interest rate decision and press conference with Federal Reserve chair Kevin Warsh
Thursday: Mayor of Greater Manchester elections
Friday: Fresh EU inflation figures published
Saturday: Brighton and Hove Pride
Sunday: EU Artificial Intelligence Act full provisions come into force
