US-EU 90-day tariff pause ends tomorrow
As the US-EU 90-day tariff pause nears its end, digital tensions remain unresolved. Despite growing pushback from startups and Member States, the European Commission stays firm on its digital agenda - from the DMA and DSA to the AI Act's rollout.
It's quiet ahead of tomorrow's 90-day tariff pause deadline between the US and EU - at least on the digital front. The European Commission continues to stand firm in its commitment to its digital rulebook, despite some Member States and politicians calling for a rethink.
Not much has changed since our last article a few weeks ago, when the EU and the US were still negotiating "non-tariff trade irritants". Calls for the two sides to align their regulatory frameworks are sounding increasingly out of touch, as both economic powers appear to be drifting further apart.
Media reports on EU-US trade negotiations are highly contradictory. One day, headlines suggest the parties are "open to negotiate EU's digital policy", the next, they’re said to be "getting closer to sealing the deal", then, some representative from the European Commission declares that the EU's digital rulebook is "not on the table" and "non-negotiable". If this is a European tactic to confuse everyone, it’s working.
DMA, DSA, digital service taxation
In February 2025, Donald Trump expressed dissatisfaction with what he saw as "unfair exploitation of American innovation abroad" - including the EU’s Digital Markets Act, Digital Services Act, and efforts to impose taxes on digital services.
Meta and Apple appealed the EU’s €700 million decision under the Digital Markets Act this week. Meanwhile, views on the Digital Services Act remain largely unchanged.
While the EU has yet to find common ground on an EU-wide digital services tax (and likely won’t), some individual Member States have either implemented such taxes or are considering them. Notable examples include Germany, which is proposing a 10% tax, and Poland - a stronghold for American tech company headquarters - where a 1.5% digital services tax is currently under discussion.
War of attrition for the AI Act's rollout
We wrote before about the Swedish and Czech government representatives, along with many startup representatives urging the Commission to postpone the implementation of the AI Act, including the GPAI Code of Practice.
The European Commission's spokesperson Thomas Regnier tried to deter business and startup representatives from raising further questions about the AI Act's rollout last Friday:
"I've seen, indeed, a lot of reporting, a lot of letters and a lot of things being said on the AI Act. Let me be as clear as possible, there is no stop the clock. There is no grace period. There is no pause"
Even if the final version of the GPAI Code of Practice turns out to be relatively moderate and includes input from major technology companies, ordinary Europeans (including startup founders, many of whom are engaging with EU policymaking for the first time) are likely to be left baffled by the realities of Brussels politics and the asymmetry of decision-making power.
No matter how many signatures are gathered or how high the combined valuation of companies opposing the premature rollout of the AI Act may be, no matter how many government representatives echo those concerns, the European Commission retains the power to sweep aside the debate without much explanation.
