Business

EU May Target US Tech in Response to Trump’s Tariff Plans, Report Warns

Published

3 months ago

February 10, 2025

RTX

Former US President Donald Trump’s plan to impose new tariffs on European imports could spark an unconventional response from the European Union—one that targets American digital services rather than traditional goods, according to a recent report from Goldman Sachs.

Rather than engaging in a tit-for-tat tariff battle on physical products, the EU may leverage its growing trade deficit in services to push back against Washington’s trade measures. With US tech giants generating billions in revenue from European markets, Brussels could consider new digital restrictions to counterbalance the economic impact of Trump’s proposed tariffs.

A Renewed Transatlantic Trade War?

Trump’s announcement last week that he intends to introduce “reciprocal tariffs” has heightened fears of escalating trade tensions between the US and Europe. The Goldman Sachs report, authored by economists Giovanni Pierdomenico and Filippo Taddei, predicts that Washington could increase duties on European car exports by 25 percentage points and impose a 10% tariff on a range of key imports, including metals, minerals, and pharmaceuticals.

These tariffs, if implemented, would affect €190 billion worth of EU exports, accounting for nearly 40% of the bloc’s total shipments to the US.

Historically, the EU has responded to similar trade pressures with countermeasures of its own. When Trump imposed tariffs on European steel and aluminum in 2018, Brussels retaliated by levying duties on iconic American products such as bourbon whiskey and motorcycles. A second round of tariffs was planned but ultimately put on hold, awaiting a World Trade Organization ruling.

This time, however, EU policymakers are expected to proceed with caution.

“We expect the EU to favor a de-escalation of trade tensions as much as possible and resort to strong retaliation only as a last resort,” the Goldman Sachs report noted.

A New Battlefield: The Digital Economy

Unlike in 2018, the EU now has an additional tool at its disposal—the Anti-Coercion Instrument (ACI), a recently introduced mechanism designed to counteract economic pressure from third countries. The ACI allows Brussels to impose tariffs and restrict access to European markets in response to coercive trade actions.

One area that could be targeted is the digital economy, where the EU runs an annual trade deficit of nearly €150 billion with the US. This imbalance is largely due to the dominance of American tech companies, which generate substantial revenues from European consumers while repatriating their earnings through low-tax jurisdictions like Ireland.

According to Goldman Sachs, the EU may look at restricting digital transactions, such as IT service royalties flowing back to the US, as an alternative to directly imposing tariffs on American goods.

“Services imported by the EU from the US span different sectors, including the financial sector, but the lion’s share are IT services that are then invoiced as royalties channelled to the US from Ireland,” the report stated. “Any restrictions on these transactions could have a meaningful impact on the services trade balance.”

The Challenges of Retaliation

While targeting US tech firms could be an effective countermeasure, any action under the ACI would require approval from at least 15 of the EU’s 27 member states—a process that could delay or complicate Europe’s response.

For now, European leaders are closely monitoring Trump’s next steps. If his administration moves forward with its planned tariffs, Brussels will have to decide whether to retaliate with direct duties on American products or take a more strategic approach—one that could see Silicon Valley caught in the crossfire of a transatlantic trade war.

Business

Saudi Aramco Profits Dip Amid Falling Oil Prices as Kingdom Commits Massive US Investments

Published

15 hours ago

May 12, 2025

Web Reporter

Saudi Arabia’s oil giant Aramco reported a 4.6% drop in first-quarter profits on Sunday, amid declining global oil prices and growing financial pressure to meet the kingdom’s ambitious development goals, including massive investments in the United States.

Aramco, the world’s largest oil producer, posted a net income of $26 billion (€23.4 billion) for the first quarter of 2025, down from $27.2 billion (€24.5 billion) during the same period last year. Quarterly revenues came in at $108.1 billion (€97.4 billion), slightly up from $107.2 billion (€96.5 billion) a year earlier, according to a filing on the Tadawul stock exchange in Riyadh.

The dip in earnings comes as global energy markets remain volatile. Brent crude, the international oil benchmark, recently traded at just over $63 (€56.7) a barrel—down from peaks of over $80 (€72) last year. Aramco’s stock, which once traded at highs near $8 (€7.2), has also slipped in recent months, closing Sunday at just over $6 (€5.4) per share.

Aramco CEO Amin H. Nasser acknowledged the challenges in a statement, saying “global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty impacting oil prices.”

Meanwhile, Saudi Arabia has pledged to invest $600 billion (€540.2 billion) in the United States during President Donald Trump’s second term. Trump, expected to arrive in Riyadh on Tuesday for his first official overseas trip since returning to office, has publicly called for that figure to reach $1 trillion (€900 billion).

The investment pledge coincides with Crown Prince Mohammed bin Salman’s ambitious domestic agenda. Central to those plans is Neom—a $500 billion (€450.1 billion) futuristic megacity being developed along the Red Sea—and preparations for hosting the 2034 FIFA World Cup, which will require tens of billions of dollars in infrastructure spending.

To help fund these initiatives, Saudi Arabia may have to dip into its sovereign reserves or increase borrowing, especially as oil revenues come under pressure. The recent decision by the OPEC+ alliance to increase oil production by 411,000 barrels per day next month is expected to complicate efforts to stabilize prices.

Aramco remains one of the world’s most valuable companies, with a market capitalization exceeding $1.6 trillion (€1.4 trillion), trailing only a handful of U.S. tech giants. While a portion of its shares trade publicly, the majority is held by the Saudi government, providing a crucial financial pillar for state-led development and the royal family’s wealth.

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Business

Eastern Europe Leads in Real Wage Growth in 2024, Turkey Tops the Chart

Published

15 hours ago

May 12, 2025

Web Reporter

Real wages rose sharply across much of Europe in 2024, with Eastern European nations recording the strongest growth, according to the latest OECD Taxing Wages 2025 report and Eurostat data. Out of 32 European countries analyzed, only four experienced a drop in real wages after adjusting for inflation.

Turkey posted the most significant gains, with nominal gross wages surging by 82.9% year-on-year—driven largely by the country’s sky-high inflation rate of 58.3%. Despite the inflation, Turkey recorded the highest real wage growth in Europe at 15.5%. However, the figure has drawn scrutiny, with opposition figures and former officials from the Turkish Statistical Institute questioning the accuracy of official inflation data.

Romania and Bulgaria followed Turkey in the real wage growth rankings. Romania saw a 20.9% increase in nominal wages, translating to a 14.3% real wage gain thanks to a comparatively low inflation rate of 5.8%. Bulgaria reported a 9.2% rise in real wages, with nominal wages up 12% and inflation held to 2.6%.

Eight European countries reported real wage growth above 7%. Besides Turkey, Romania, and Bulgaria, this group includes Malta (9%), Hungary (8.9%), Latvia (8.4%), Poland (7.8%), and Lithuania (7.2%).

In Southern Europe, wage growth was more modest but still positive. Italy led the region with a 2.7% increase in real wages, followed by Cyprus (2.1%), Spain (1.9%), and Greece (1.7%).

Among Europe’s five largest economies, Italy also recorded the highest real wage growth. Germany followed at 2.2%, ahead of Spain (1.9%), the UK (1.6%), and France, which reported the lowest increase at just 0.7%.

Only four countries saw real wage declines in 2024: Belgium (-1%), Finland (-0.9%), Iceland (-0.7%), and Luxembourg (-0.4%). Finland was the sole country where nominal wages slightly declined, falling by €14 compared to the previous year. However, with inflation under 1%, the resulting drop in real wages was relatively small.

The figures cover gross wages before taxes and social contributions and reflect the average earnings of a single worker without children. While 2024 brought a strong rebound in wage growth for many European workers after years of stagnation, wide regional disparities persist—underscoring the uneven impact of inflation and wage policy across the continent.

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Business

Expert Tips on Building a Solid UK Pension Plan Amid Rising Costs

Published

3 days ago

May 10, 2025

Web Reporter

As the cost of living in the UK continues to rise, many Brits are finding it harder to save for retirement. However, with life expectancies also increasing, experts warn that starting a pension plan as early as possible is more important than ever. A recent YouGov survey revealed that 38% of UK residents aren’t saving for retirement, with only 28% contributing up to 10% of their income.

To help navigate the complexities of retirement savings, Euronews reached out to financial experts for their top tips on building a solid pension plan.

Start Early and Save More

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, stresses the importance of saving as much as possible, as early as possible. She suggests that the earlier you start contributing to your pension, the more your investments can grow over time. A simple but effective strategy is to increase contributions every time you receive a pay raise. “You’re not used to having that extra money, so it’s easier to allocate it to your pension,” Morrissey explains.

Negotiate with Your Employer

For those enrolled in workplace pension schemes, Morrissey advises negotiating higher contributions. By default, UK employers must contribute at least 3% of employees’ salaries into pension pots, with employees contributing 5%. Some employers offer more generous contributions, sometimes matching what employees put in. Another option is a salary sacrifice scheme, where employees can reduce their salary and have the equivalent amount paid directly into their pension, benefiting from tax reductions.

Stay Engaged and Monitor Your Investments

Claire Trott, divisional director of retirement & holistic planning at SJP, emphasizes the importance of regularly checking your pension progress. “At least once a year, assess how much you’ve saved and determine if it will be sufficient for retirement,” she advises. Additionally, it’s essential to review where your contributions are being invested. Workplace pension schemes often place contributions into default funds that may not always be the most beneficial for your individual needs.

Consider Alternative Savings Products

In addition to pensions, Lucie Spencer from Evelyn Partners suggests utilizing tax-free ISAs (Individual Savings Accounts) to complement pension savings. Although contributions to ISAs are made from after-tax income, the funds grow tax-free, making them an ideal option for retirement savings.

Be Cautious About Early Withdrawals

While it’s tempting to access pension funds early, experts recommend against this unless absolutely necessary. Early withdrawals reduce the time for investments to grow and may push individuals into higher tax bands if they continue to earn income. The state pension can typically be accessed at age 66, with private pensions available at age 55 (rising to 57 in 2028).

Consolidate Pension Pots

For those who switch jobs frequently, pension pots can become fragmented. Claire Trott advises consolidating multiple pension pots into one to simplify management and reduce administrative hassle. However, it’s important to consider that older pension schemes, particularly those before 2006, may offer better benefits than more recent ones.

Utilize “Carry Forward” Rules

The “carry forward” rule allows individuals to top up their pensions by using unused tax relief from the last three years. For example, high earners can make significant contributions to their pensions, sometimes up to £220,000, if they have unused allowances from previous years.

Don’t Overlook the State Pension

Finally, experts stress the importance of keeping track of your state pension entitlement. To receive the full state pension, individuals need 35 qualifying years of National Insurance contributions. Though state pensions don’t require as much management as workplace or private pensions, they provide a guaranteed income for life, making them a crucial part of retirement planning.