Economy
Trade partners voice dismay, anger over US forced labor tariffs
The U.S.’s latest set of tariff hikes drew heated objections Friday from America’s trading partners, with Europe questioning Washington’s rationale for imposing new duties, China warning against trade wars and Brazil and Australia slamming them as unjustified.
The Trump administration announced extra tariffs of 10% to 12.5% on 60 economies late Thursday, saying the countries had failed to adequately enforce a ban on goods made with forced labor.
The move is the White House’s first step in efforts to rebuild President Donald Trump’s near-global tariff wall after the U.S. Supreme Court in February struck down his “reciprocal” duties of 10% to 50% imposed last year under a national emergencies law to try to shrink the U.S. trade deficit.
Those tariffs expired at 12:01 a.m. Friday. The new duties took effect at that exact same moment, with goods in transit exempted until 12:01 a.m. EDT on July 28.
The U.S. imposed a 10% duty on goods of Argentina, Bangladesh, Britain, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, saying they had bans or plans to ban forced labor imports but were not effectively enforcing such prohibitions.
The European Union, Taiwan, Japan, South Korea and Switzerland were assigned rates that, combined with preexisting most-favored-nation tariff rates, totaled 10% or 12.5%.
The other 38 countries were assigned a 12.5% rate. These include Vietnam, which issued a new decree this week that sets out more detailed rules banning imports of goods made with forced labor, and China.
A U.S. investigation serving as the basis for the tariffs did not provide meaningful evidence to support allegations of forced labor.
EU seeks clarification, China warns against trade war
European Union foreign policy chief Kaja Kallas questioned the U.S. stance, saying on Friday that allegations of shortcomings in the bloc’s forced labor controls were unfounded.
“You can’t say that for the European Union,” Kallas told Reuters on the sidelines of ASEAN meetings in Manila.
“If you compare our labor laws to the ones of the United States, I mean we have, people have paid vacations, we have very good conditions, labor conditions for our employees, so it’s not really grounded,” Kallas said.
Kallas said the EU will seek clarification from Washington, adding that the bloc had honored commitments under a transatlantic trade agreement reached last year and viewed the new tariffs as a shock.
“We had a deal with America and we have kept to that deal, that side of the deal,” she said. “That’s why this is a negative surprise that this agreement is not kept.”
China, slapped with the highest rate, condemned the fresh U.S. move and warned Washington against waging a trade war.
“We oppose all forms of unilateral tariff measures,” Chinese Foreign Ministry spokesperson Lin Jian told a news briefing on Friday.
“Tariff wars and trade wars are not in the interests of any party,” he warned.
Trade tensions have clouded relations between China and the U.S., two of the world’s biggest economies, as Trump’s hefty “Liberation Day” tariffs resulted in a sharp drop in Chinese exports to the U.S.
Trump and Chinese leader Xi Jinping, who agreed to set up new boards of trade and investment at their mid-May meeting in Beijing, are expected to meet again in September.
Some Chinese exporters say, however, the impacts are so far limited as the latest U.S. tariffs on China are still at lower levels than last year’s rates, which were initially 34%.
Australia and Brazil described the new tariffs as unjustified and said they would seek to have them removed, while Norway said there was “no basis” for them.
Canada – hit on Monday with new Trump tariffs on $20 billion worth of goods – issued a muted response.
“We will continue engaging constructively with the United States on this matter, as well as other outstanding issues, over the coming weeks to the mutual benefit of our citizens,” said Dominic LeBlanc, Canada’s minister in charge of U.S. trade.
Australian Trade Minister Don Farrell rejected claims linking Australia, a major exporter of beef, gold and copper, to modern slavery.
“We believe that amongst all of the countries in the world Australia does take the issue of slavery, modern slavery, seriously, and will continue to do that,” Farrell told reporters in Adelaide.
Australia believes the higher tariffs are “completely unjustified and we will continue to lobby the United States Trade Representative to remove all tariffs on Australian goods,” Farrell said.
New Zealand Prime Minister Christopher Luxon said the tariffs on his country were “extremely disappointing,” unjustified and harmful to trade.
“Tariffs are not the way – they drive up costs and uncertainty for businesses,” Luxon wrote on X.
Also facing a 12.5% tariff, Singapore’s Ministry of Trade and Industry, which reiterated its stance of not condoning the use of forced labor, said it would “continue to engage the USTR (United States Trade Representative) to explore options.”
Some hope to forestall tariff hikes
Japan likewise protested the tariff imposed on its exports, noting Tokyo had been reassured by the Trump administration that there would be no more tariffs on top of an earlier agreement on a 10% U.S. import duty.
“Our understanding is both sides are still committed to that,” Chief Cabinet Secretary Minoru Kihara told a routine news conference.
“It is regrettable that the measure imposes tariffs on the grounds of the non-existence of measures banning imports of goods made by forced labor, even though Japan’s industry and trade are in line with international rules,” Kihara said.
South Korea said it will maintain close communication with the U.S. to preserve a mutual “balance of benefits.”
South Korea’s Trade Ministry said the announcement eased some uncertainty over U.S. trade policy, but noted that a Section 301 investigation into alleged Korean excess production continues.
The combined duties on South Korean exports should not exceed 15%, the ministry said in a statement.
Thailand noted it is subject to the new 12.5% tariff by the U.S. under the forced labor provision, but the measure exempts around 2,120 items, representing more than half the value of Thai goods exported to the U.S.
Thailand also is monitoring the possibility of an additional tariff on the grounds of structural overcapacity under another ongoing U.S. probe against 16 countries, but Washington has not yet announced those results, the Thai Commerce Ministry said in a statement.
Latest import duties might stick
Wendy Cutler, a former senior U.S. trade official, said the latest round of tariffs involved “few surprises” since they range just between 10% and 12.5%.
The U.S. Trade Representative’s office spent four months investigating the basis for those tariffs to meet legal requirements under Section 301 of the U.S. Trade Act of 1974.
“Time will tell whether the third attempt to impose tariffs is the charm and this action stands up to legal challenges,” said Cutler, senior vice president of the Asia Society Policy Institute.
These duties are less likely than earlier ones to be overruled by U.S. courts, she said.
Further tariffs may be coming in the fall related to alleged structural excess capacity of trading partners, she noted.
Washington is generally tending to engage in increased trade friction, William Bratton of BNP Paribas said in a research note Friday.
“On the positive side, however, these tariffs are lower than the earlier (Emergency Powers Act) ‘reciprocal’ tariffs and appear to exempt a substantial proportion of Asia’s current trade flows with the U.S.,” he said.
The Trump administration included many exclusions of products from the tariffs, including for goods the U.S. does not produce, Cutler noted.
“This should reduce the impact of these duties. Nevertheless, they will contribute to higher prices both for end consumers and businesses importing inputs and machinery,” she said.
Russian e-commerce giant Wildberries, Moscow’s answer to Amazon, said on Friday that three more of its warehouses had been attacked by Ukraine overnight, part of a widening campaign by Kyiv to damage Russia’s economy and logistics chains.
A video from the scene of the attacks in St. Petersburg and nearby showed two giant plumes of thick smoke rising into the sky.
Tatyana Kim, Wildberries’ founder and Russia’s wealthiest woman, said the latest attacks had targeted warehouses in St. Petersburg, in the surrounding Leningrad region and in Simferopol, the main city in Russian-annexed Crimea.
“We managed to save some of the premises and goods. I would like to thank our staff, our heroes – a swift evacuation was carried out at all warehouses,” Kim said in a statement. “According to preliminary reports, there were no casualties.”
“All of our efforts are now focused on redistributing goods across our warehouses to ensure more efficient stock turnover and the economic stability of our partners,” she said.
Wildberries, whose banking arm had sanctions imposed on it by the European Union this week over its financial contribution to the Russian budget, plays a central role in Russia’s consumer economy.
Its targeting by Ukraine appears to be part of Kyiv’s attempts to ensure ordinary Russians feel the impact of the war, which has raged on Ukrainian territory for more than four years.
Sellers face serious losses
The strikes, the fourth on Wildberries’ facilities since last weekend, threaten serious losses for businesses that sell through Wildberries and potential disruption to customers who use it to buy clothing, appliances, medicines, cosmetics and a host of other products.
Ukrainian President Volodymyr Zelenskyy has described the targets as logistics hubs involved in supplying Russian forces with drone components and other equipment. The Kremlin has denied that Wildberries handles military supplies. Kim has accused Ukraine of attacking ordinary people doing their jobs.
Eight Wildberries warehouses, accounting for over 10% of the company’s logistics capacity, have now been attacked since July 18, when the first attack on the retailer killed eight workers.
Kim said the company was working around the clock to try to maintain the quality of its service.
Wildberries can handle over 20 million orders a day.
Together with smaller rivals, Wildberries and top competitor Ozon sell goods and services worth the equivalent of 8.5% of Russia’s gross domestic product and employ 4 million people, or more than 5% of the country’s workforce.
Look at Wildberries
Wildberries was launched in 2004 by Kim, a teacher and a young mother at the time, focusing at first on selling clothes.
Since then, the platform with its distinct purple logo has become an industry leader and household name, allowing big and small businesses alike to sell their goods to customers across the country by storing, shipping and delivering their inventory. In April, Forbes Russia estimated Kim’s fortune at $8.1 billion.
The marketplace features all sorts of goods – clothes, books, cosmetics, toys, appliances, household items, sports gear and much more. There’s an “E-Pharmacy” page and a travel section where users can book plane tickets or hotels.
In 2021, Kim acquired a small bank and turned it into what is now Wildberries Bank, but that institution has since come under sanctions by the U.K. and the European Union.
Last year, the company had more than 200 logistics facilities totaling over 5.2 million square meters (55 million square feet), with plans to expand in 2026, including planned warehouses in Belarus and Kazakhstan, where Wildberries operates as well. It also operates in Russian-held Crimea.
Some 500,000 to 800,000 sellers are involved with Wildberries, estimated Sergei Semko, a leading analyst with Data Insight, a Moscow-based company that analyzes online retail in Russia.
Wildberries currently accounts for 52% of all online orders in Russia, Semko told The Associated Press (AP).
Türkiye’s central bank is likely to pursue a gradual normalization of monetary policy in the remainder of the year by lowering its effective funding costs before considering further policy rate cuts, according to economists.
Their estimates came after the Central Bank of the Republic of Türkiye (CBRT) kept its benchmark one-week repo rate at 37% on Thursday, as expected, leaving borrowing costs unchanged for a fourth consecutive meeting.
Policymakers thus maintained a cautious stance amid heightened geopolitical uncertainty and lingering inflation risks as oil prices rise again after the U.S.-Iran conflict flared up.
CBRT’s interest rate corridor was also left unchanged, with the upper and lower bounds remaining at 40% and 35.5%, respectively, in line with expectations.
As a result, the bank will continue to fund through the upper bound of the corridor, as the repo window has remained closed since the start of the Middle East conflict.
In its statement, the bank said underlying inflation eased modestly in June, but leading indicators suggested it would temporarily pick up in July.
It also warned that rising energy prices amid heightened geopolitical uncertainty posed upside risks to inflation, while noting that recent data pointed to a more pronounced weakening in domestic demand.
Limited room
Economist Haluk Bürümcekçi said the CBRT had only limited room for policy rate cuts during the remainder of the year, even under a more favorable macroeconomic scenario.
He said the bank would likely first unwind its temporary monetary tightening by shifting funding back toward one-week repo auctions before lowering the benchmark policy rate, provided global conditions improve.
Before the recent escalation of the Iran war, the prevailing expectation was that the CBRT would begin easing through its liquidity tools, allowing the effective cost of funding to fall from 40% to 37%, either gradually or through full normalization.
Since the conflict started, the bank has halted an easing cycle that began in late 2024 and taken other liquidity steps.
Annual inflation eased to 32.1% last month from 32.6% in May. The decline had stalled following a sharp rise in energy prices caused by the war. On a monthly basis, consumer prices rose 0.99% in June, slowing from 1.7% in May.
‘Wait-and-see mode’
Analysts at the Dutch financial giant ING said they expect the central bank to remain in “wait-and-see mode” in the near term before deciding whether to lower the effective cost of funding toward the policy rate.
A renewed agreement in the U.S.-Iran conflict could create scope for the bank to normalize the effective funding rate as early as August or September, depending on developments in inflation and reserve dynamics, they added.
Bürümcekçi noted that the CBRT maintained the 450-basis-point spread between its overnight borrowing and lending rates and signaled continued caution by highlighting expectations of a temporary rise in underlying inflation in July and ongoing increases in energy prices.
Depending on uncertainty in global markets and the trend in foreign exchange demand, he said the current outlook is expected to be maintained for some time, with the CBRT providing funding through the overnight lending channel rather than holding weekly repo auctions.
He added that the bank’s statement suggested policymakers would continue their cautious stance on macroprudential measures and liquidity management.
Kutay Gözgör, research director at Kuveyt Türk Investment, said the statement retained a cautiously hawkish tone, with no explicit guidance on restarting one-week repo auctions.
Compared with the previous policy statement, the bank placed greater emphasis on a temporary increase in underlying inflation and renewed upward pressure from energy prices, indicating a more cautious assessment of near-term inflation risks, he said.
At the same time, Gözgör said the bank struck a somewhat more dovish tone on economic activity by stating that weakness in domestic demand had become more pronounced, suggesting tighter monetary conditions were having a stronger effect on spending.
Return to repo auctions
He said the combination of slowing domestic demand and persistent inflation risks suggested policymakers still saw limited room for near-term easing.
Gözgör expects the CBRT to begin its normalization process by reintroducing one-week repo auctions, potentially as early as August if inflation continues to improve.
“Although the lack of clear guidance regarding a return to repo auctions or the interest rate cut process may limit strong dovish pricing in the short term, we believe the possibility of a gradual normalization remains intact, contingent on an improvement in the inflation outlook,” he noted.
That would gradually reduce the average funding cost before measured policy rate cuts later in the year. He forecasts the bank will lower the policy rate to 34% by the end of 2026, assuming inflation continues to moderate.
The CBRT raised its end-2026 inflation forecast to 24% from 16% in its quarterly inflation report published in mid-May, saying the short-term inflationary effects of the Iran war would remain “pronounced.”
The bank projects inflation falling to 15% at the end of 2027 and 9% at the end of 2028.
Faced with disruptions to its primary oil export routes through the Hormuz and Bab el-Mandeb straits driven by Iran and Houthi rebels, Saudi Arabia is forced to reroute petroleum shipments through Egypt’s Suez Canal.
While the kingdom has previously used the Suez route to export some of its oil, it has not tested it as the main export outlet for decades.
Unlike in the 1970s and 1980s, when Saudi Arabia’s top oil buyers sat in Europe and the United States, the majority of its buyers today are in Asia.
To get to Asia, tankers with Saudi oil will have to circumnavigate the whole of Africa, adding around a month to their journey.
It takes only 19 days for a tanker to sail from Saudi Arabia’s Red Sea port of Yanbu to Taiwan via Bab el-Mandeb.
A route via Suez, the Mediterranean and Gibraltar and then around the Cape of Good Hope takes 48 days, according to Kpler and LSEG shipping data.
The journey would double fuel costs alone to around $2.87 million from $1.26 million, according to Reuters calculations using LSEG data.
Crossing the Suez Canal adds $1 million in fees, according to LSEG.
Oil flows through the Strait of Hormuz and Bab el-Mandeb/Suez Canal have been disrupted by conflict in the Middle East in recent years, stoking higher prices and inflation across the globe.
Transits through the key shipping bottlenecks this year have been roughly one-third of what they were in 2023.
Saudi Arabia rerouted most of its oil exports from the Gulf to the Red Sea when the U.S.-Iran war disrupted shipments via Hormuz in February. The Houthis attacked ships in the Red Sea this week, making the workaround unsafe and encouraging the kingdom to send oil via the Suez Canal.
Big tankers will need to sail via the Suez half empty due to restrictions and top up in the Mediterranean, according to Energy Aspects.
To achieve that, Saudi Arabia could partially unload tankers into the Sumed pipeline, a 320-kilometer (200-mile) oil link bypassing the Suez and connecting Ain Sokhna oil terminal on the Red Sea to Sidi Kerir on the Mediterranean.
The pipeline can transport up to 2.5 million barrels per day out of the kingdom’s total exports of 7 million bpd.
The U.S. announced Thursday that it would impose new tariffs on 60 trading partners over forced labor concerns, replacing an expiring global duty rolled out by President Donald Trump earlier this year.
The levies, which take effect Friday, range from 10% to 12.5% and will target countries that account for 99% of U.S. imports, including major economies like China, India and the European Union.
“The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” said U.S. Trade Representative Jamieson Greer in unveiling the duties.
“Today’s action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere.”
The Trump administration has moved swiftly to rebuild the president’s tariff wall after the Supreme Court struck down a host of his duties in February – dealing a blow to his ability to unleash steep levies at will.
After the legal setback, Trump tapped different authorities to reimpose a 10% tariff on imports. But this only lasts 150 days, expiring Friday.
The volley of new duties, initially proposed in June, will now take its place.
The measures were proposed after a months-long investigation and are considered more resistant to legal challenges than earlier moves.
Under Thursday’s announcement, economies that have implemented a forced-labor prohibition are hit with the lower 10% rate. They include Canada, the EU and the United Kingdom.
Others were deemed to deserve harsher levies, receiving the higher 12.5% tariff, a U.S. official told reporters. Trading partners like China and Japan are covered in this group.
Goods already facing Trump’s sector-specific tariffs – like steel and aluminum – will not be impacted.
Goods entering under the U.S.-Mexico-Canada free trade pact will also be exempt, a U.S. official told reporters.
Maintaining leverage
And more tariffs are likely coming: The U.S. Trade Representative’s office has launched a probe into whether 16 countries – accounting for 70% of U.S. imports – have overproduced goods, pushing down prices and putting U.S. companies at a disadvantage in global markets. The administration has yet to complete that investigation.
These could result in different rates among countries eventually, as Trump had done before his legal setback.
The Trump administration’s move to impose a baseline tariff while sustaining the threat of further duties ahead maintains leverage over its trading partners, trade lawyer Greta Peisch told Agence France-Presse (AFP).
It also creates an incentive for countries to comply with trade pacts that they earlier struck, she added.
In spending time on investigations, officials want their incoming tariffs to be robust if there are court challenges, said Peisch, a former USTR general counsel who is now a partner at Wiley Rein.
“This makes it much more likely that they stay for the duration of Trump’s term,” signaling a “much more protectionist world’s largest economy” moving forward, Josh Lipsky of the Atlantic Council think tank told AFP.
The Trump administration has been hunting for options that would allow it to aggressively deploy tariffs, said former U.S. trade official Ryan Majerus.
In the longer term, Section 301 of the Trade Act of 1974, which Greer tapped to impose the latest duties, provides “more flexibility than people realize,” Majerus said.
Once they are in place, officials can modify them based on new developments, added Majerus, a partner at King & Spalding.
The Section 301 permits the president to impose import taxes and other sanctions against countries found to engage in “unjustifiable,” “unreasonable” or “discriminatory” trade practices. Trump used Section 301 to impose big tariffs on China in his first term, and they survived court challenges.
‘Fragile’ deals
The latest salvo comes shortly after a separate 25% tariff took effect on various Brazilian goods, with Washington accusing the Latin American giant of unfair trade practices after a yearlong investigation.
This week, Trump also ordered new 50% tariffs on many Canadian products, citing Ottawa’s “discriminatory treatment” against American alcohol, automobile and dairy products.
The Canadian tariffs taking effect in a month relied on an untested legal provision, showing that Trump has “other tools in the toolkit” to wield, said Lipsky.
This signals that U.S. tariff deals “are still fragile.”
Nonetheless, the EU, which earlier signed a trade pact with the United States, expects Washington “will honor the commitments that are spelled out under the EU-U.S. Joint Statement.”
The European Central Bank (ECB) kept interest rates unchanged as expected on Thursday, but opened the door to another increase in September, as renewed conflict in the Middle East has largely erased any hope of a quick moderation in energy costs.
The ECB raised rates in June and hinted at more to come, but a string of benign data since then – on prices, wages, economic activity and inflation expectations – had made a quick follow-up step less urgent.
The return of oil prices to $100 per barrel as the U.S.-Israeli war on Iran disrupts shipping did stir talk of policy tightening at this month’s policy meeting, ECB President Christine Lagarde said, supporting market bets that a rate hike in September is likely.
“There were some governors who asked themselves whether we should not consider a hike; in other words, raising the three interest rates,” Lagarde told a news conference. The Governing Council’s decision to keep the benchmark deposit rate unchanged at 2.25% was nevertheless unanimous, she said.
The ECB had flagged a hold in the weeks leading up to Thursday’s meeting on the premise that energy prices were falling quickly and moving closer to the mildest of three scenarios it set out in March.
But the recent reversal, coupled with a surge in natural gas prices to more than three-year highs, has also reset energy price expectations.
“As we stand now today, (the milder scenario) looks quite unlikely, let’s face it,” Lagarde said. “The full effects of the energy shock have yet to play out.”
Economists said that was consistent with a hike in September.
“Lagarde’s comments at the press conference clearly point to a September rate hike,” ING economist Carsten Brzeski said. “The European Central Bank has again turned more hawkish, suggesting that a September rate hike is almost a done deal.”
The U.S. Federal Reserve (Fed) and the Bank of England (BoE), both of which make rate decisions next week, are also weighing the timing of possible hikes in months to come.
For the ECB, investors are betting on almost three more interest rate increases in the coming year, with a first move fully priced in by October and the second by next February. This pricing reflects energy prices more than economic fundamentals, however, and most economists polled by Reuters say the 21-country eurozone will need far less policy tightening to keep a lid on inflation, which could hover around 3% in the coming months. The ECB targets an inflation rate of 2%.
No second-round effects yet
The key reason the ECB was in no rush to act on Thursday was that long-feared second-round effects of the energy price spike have yet to materialize.
“We are not seeing a second-round effect,” Lagarde said.
Firms surveyed by the bank did not point to such impacts in their pricing or pay decisions and wage growth is continuing to slow, as the ECB has long forecast, Lagarde said: “None of those elements for the moment… are giving us second-round effects indications.”
One reason why such impacts may be slow to materialize is that the labor market remains relatively soft – particularly in Germany, the bloc’s biggest economy – while surveys point to muted pay pressures. Consumers have dialled back their price expectations and services inflation actually slowed last month.
Trade tensions, high energy costs and China’s expansion into some of Europe’s key export markets, meanwhile, suggest that the bloc’s industries will continue to struggle, putting downward pressure on labor demand.
Scorching summer weather in much of Europe this month is a potential risk, however, as Lagarde acknowledged. The heat may have damaged crops and could push up food prices, while low water levels on key rivers could create shipping bottlenecks.
Asked about persistent rumors that she may leave the ECB early, Lagarde said she was not about to depart but also did not say she would stay until her term expires in late 2027.
“You are not going to see the back of me before 2027,” the ECB president said. “When there are clouds on the horizon, the captain stays on the ship.”
The European Union on Thursday hit Alphabet’s Google with fines totaling 890 million euros ($1 billion), in a move that risks escalating tensions with the United States.
The EU fined the U.S. tech giant 460 million euros for illegally favoring its own services – such as Google Flights and Google Hotels – over rivals in search results.
A second fine of 430 million euros was levied because Google barred app developers from showing consumers offers, free of charge, outside the app store Google Play, the European Commission said in a statement.
The fines underscored Europe’s determination to prevent Big Tech companies from thwarting rivals, defying U.S. criticism and retaliatory tariff threats.
“After this decision, we want to make sure that there is more competition and also other companies are able to innovate,” EU tech chief Henna Virkkunen said.
A senior EU official said Google still favors its own services, though the second fine covers only the period from March 2024 to December 2025.
‘Not fair competition’
The U.S. tech giant criticized the EU findings and said it might take the Commission to court. It also accused the EU of dismantling safety protections on Google Play through its enforcement.
“To comply, we are having to strip away real-time Search features Europeans love – like instant pricing and direct availability for hotels, flights, and restaurants – and dismantle safety protections on Google Play,” Google President of Global Affairs Kent Walker said in a statement.
“This isn’t fair competition; it’s product degradation driven by a small group of self-serving complainants, with European businesses and consumers taking the hit,” Walker noted.
“Regulation should improve products, not make them worse.”
The fines land just days before the first anniversary of a tariff deal between Washington and Brussels that had eased trade tensions.
President Donald Trump’s administration has repeatedly accused Brussels of targeting U.S. tech firms and has threatened retaliatory tariffs.
U.S. Trade Representative Jamieson Greer said the fines and other EU actions undermined hopes for smoother trade ties, warning they “pose a real risk to the continuation of transatlantic stability with respect to trade.”
Greer said in a statement noting a recent record loan to Airbus from the EU lending arm: “It becomes clear that the EU continues to target the most competitive U.S. companies.” He did not mention any U.S. plans to retaliate.
‘Constructive’ talks to avoid more penalties
The penalties are the largest yet against a single company under the Digital Markets Act (DMA), the EU’s signature tech competition law.
In 2025, the bloc fined Meta 200 million euros and Apple 500 million euros under the same rules.
The DMA, which took effect in 2024, aims to curb what Brussels views as Big Tech’s excesses and ensure fair competition in the digital economy. Washington firmly objects to the DMA and other EU tech regulations.
Under the DMA, the EU can fine companies up to 10% of their global turnover for violations.
An EU official said Thursday’s penalties amount to just 0.22% of Google’s turnover.
The Commission warned the fines could grow further, threatening “periodic penalty payments” if Google fails to comply within 60 days.
“The best products should succeed because they’re better, not because they’re owned by the company running the search engine,” EU antitrust chief Teresa Ribera said in a statement.
The Commission still pointed to a “constructive dialogue” with Google and significant progress made to comply with the DMA, indicating that daily penalties for non-compliance are likely off the table.
“Google has proposed and started testing changes to how it presents its own services on Google Search for free services such as shopping, hotels and flights,” the Commission said, calling it substantial progress.
“The Commission also notes that Google has proposed and started testing changes to how it presents shopping ads and content related services, such as sports,” it said.
The EU watchdog also said Google may apply the principles of Thursday’s decision to its AI-generated summaries known as AI Overviews and AI Mode and that talks would continue to this end.
Google’s changes to its steering terms on Google Play received a tentative thumbs up from the Commission.
“These constitute good progress towards compliance and will also be assessed in light of the cease and desist order of today’s decision,” it said.
EU ‘discriminatory’ rules
Google is no stranger to EU fines.
Between 2017 and 2019, Brussels hit the company with penalties totaling 8.2 billion euros, and in September last year imposed a separate 2.95-billion-euro fine under different antitrust rules – a move that prompted Trump to threaten retaliation.
The EU appeared unfazed Thursday by the prospect of a fresh U.S. response.
Brussels’ duty, Ribera told reporters, is to “ensure that the regulation that is being adopted by our sovereign institutions is fully enforced and respected.”
She noted that U.S. authorities were pursuing “very similar approaches” in comparable cases of their own.
The EU and the United States agreed earlier this year to address friction over the bloc’s digital rules through talks, though those discussions have yet to begin.
Greer said Washington was seeking to “resolve our concerns” about the EU rules through dialogue, but that “real dialogue can only take place during a cease-fire.”
The fines against Google had been expected for months, the product of a probe launched in 2024, though Brussels has faced accusations of delaying the decision out of concern for relations with Washington.
On Tuesday, some 25 Republican lawmakers urged Trump in a letter to use tools such as trade investigations against the EU’s “discriminatory” digital rules – a move that could trigger higher tariffs.
Virkkunen insisted Europe would not back down.
“We are very committed to our rules,” she told journalists.
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