‘EU must cause economic pain to US’ – German MEP

The German MEP Anna Cavazzini is chair of the European Parliament’s internal market and consumer protection committee.

Cathy Newman: What can you do as a bloc, to target, to maximise the political pain to the US, but minimise the economic pain to the EU? What would you recommend there?

Anna Cavazzini: You mentioned it. I think it’s really important to cause some economic pain to the US in order to force Trump to change his course. And I think partially, we see already some results. You know, the stock market is going downhill. A lot of American companies are speaking out against the tariffs because they see the bad results. So I think if we make it possible to target really Trump’s voter spaces or companies that are supporting Trump, and make it very costly for him to continue with his course, we might be able to succeed and get him back to the negotiation table.

“It’s really important to cause some economic pain to the US in order to force Trump to change his course.” – Anna Cavazzini

Cathy Newman: So taxing the tech companies?

Anna Cavazzini: Yes, so far the EU was putting forward very targeted counter tariffs on stuff like bourbon or jeans in order to retaliate. But I think now with the escalation that we’re seeing today from Trump’s side, that he will probably announce tariffs on all goods, from all countries in the world. Then I think we need a bigger response. And indeed, one option could be a digital services tax that also some EU member states anyhow have already put forward. But more member states could follow.

Cathy Newman: But it’s interesting, there’s a real divergence with the UK on this because the UK is trying to curry favour with the US administration, by promising to reduce the digital services tax. You, in the EU, you want to escalate this.

Anna Cavazzini: Yes, of course, every country can decide on themselves. But I would say, and we try to negotiate as European Union, also with Trump. Of course, we tried to have a cooperative approach. We tried to deal with him. But so far, he’s not ready to deal with us, so I think he is only understanding the language of strength. And we also see that a lot of tech companies are supporting Trump. So I think we need to have a leverage in order to deal with him and not just give in and try to have a deal with him, because this will just not work. So I really also hope that Great Britain joins forces, works very closely with the European Union, with other allies in the world, like with Canada, or whatever, South Korea, Japan, in order to be sure that we have a broad coalition against this very disastrous economic policy that Trump is leading.

“I think we need to have a leverage in order to deal with him and not just give in and try to have a deal with him, because this will just not work.” – Anna Cavazzini

Cathy Newman: But this is an escalation, you confirmed that and you think that’s what needs to happen?

Anna Cavazzini: Yes, Trump is escalating…

Cathy Newman: No, the EU is escalating if you do the digital services tax.

Anna Cavazzini: No, Trump is escalating in putting tariffs forward that are not rightful, that are not just. Trump is escalating. And we need to have a response that is working in order to make sure that we are getting back to the fair system that we had before and that we’re not destroying millions of jobs on both sides of the Atlantic. Just because Trump has a mood or thinks this is the right thing to do, to just go against any global agreements. I think this is what you call escalation, not our reaction.

“We need to have a response that is working in order to make sure that we are getting back to the fair system that we had before and that we’re not destroying millions of jobs on both sides of the Atlantic.” – Anna Cavazzini

Cathy Newman: There is talk of the EU invoking anti-coercion regulations, what’s been nicknamed the ‘trade bazooka’. What would that look like? Do you advocate that too?

Anna Cavazzini: Yeah, we have indeed this instrument in the European Union that was never used, but it was created and designed for a case like when the EU is economically blackmailed. And I think what we probably see today could count as such a situation. So the EU can basically restrict access from, let’s say, American companies, banks, or financial companies, insurance companies to the EU market, or put levies in place in order to raise more money. And I think this is definitely on the table. I think at the moment all instruments that we have are on the table and we need to use them smartly.

Cathy Newman: You’re going to chuck everything at it.

Watch more here:

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