Trump Threatens More Tariffs Against EU After Google Fine

President Donald Trump is threatening a tariff investigation against the European Union. (Mandel Ngan / AFP / Getty Images)

President Donald Trump threatened a tariff investigation against the European Union after it imposed a nearly $3.5 billion fine on Google for violating digital competition rules.

In a social media post Friday, Trump said he would start a Section 301 investigation—which involves unfair trade practices—if the EU doesn’t reconsider the fines.

“This is on top of the many other Fines and Taxes that have been issued against Google and other American Tech Companies, in particular. Very unfair, and the American Taxpayer won’t stand for it! As I have said before, my Administration won’t allow these discriminatory actions to stand,” Trump posted.

The move could lead to another trade escalation. It also could pave the way for a Plan B if the Supreme Court sides with lower court rulings that the administration’s sweeping tariffs using the International Emergency Economic Powers Act are illegal.

“It’s a perfect cover for rolling out an IEEPA alternative without looking like he’s afraid of the Supreme Court ruling,” said Henrietta Treyz, head of economic policy research at Veda Partners.

Trump’s post was the latest reminder the trade agreements rolled out in recent weeks, including with the EU, are tenuous. Not only is the Supreme Court expected to hear the administration’s appeal related to its sweeping tariffs using IEEPA but the details of these pacts are still being negotiated—leaving room for them to fall apart.

Treyz adds that there has already been tension with Europe related to details around pharmaceutical and auto sector levies, as well as a fracturing within Europe around the deal.

For Europe, the digital service tax is crucial to fill a hole in its deficit. The U.S. is pushing back, in part to dissuade other countries such as South Korea from pursuing such a tax.

Other developments through the day raised questions about relationships with trading partners as well, including an immigration raid at the construction site of a battery plant in Georgia that will be run jointly by Hyundai and LG Energy Solutions . More than 300 South Korean nationals were detained.

Hyundai said that none of the workers were directly employed by them. LG said it would “fully cooperate” with authorities.

In a televised address, South Korean Foreign Ministry spokesperson said the business activities of investors and the rights of its nationals “must not be unjustly infringed in the process of U.S. law enforcement.”

Treyz’s message for investors is that the current trade deals are meaningless.

“Rates can change and at any time and the administration is creating new pathways for its tariff authority, such as through Section 301 of the Trade Act. The IEEPA tariffs are on shaky ground,” Treyz said.

Corrections & Amplifications: The EU fined Google $3.5 billion. An earlier version of this article incorrectly said $3.5 million.

Write to Reshma Kapadia at reshma.kapadia@barrons.com