President Donald Trump lashed out at the European Union’s $5bn fine against Google over its mobile phone operating system in the latest trade-related salvo fired from the White House.
The escalating trade conflict between the US and EU surfaced in tense exchanges with NATO allies during Trump’s European visit last week. The two sides have been locked in a circle of tit-for-tat retaliation since Trump imposed tariffs on steel and aluminium imports and the EU retaliated with duties on a basket of goods.
Trump is now threatening to impose crippling levies on auto imports and the EU is readying another round of counter-measures.
"I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the US, but not for long!" Trump said in a Twitter posting on Thursday.
I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long!— Donald J. Trump (@realDonaldTrump) July 19, 2018
Alphabet’s Google received a record €4.3bn antitrust fine from the EU on Wednesday and was ordered to change the way it puts search and web-browser apps onto Android mobile devices.
Google was given until mid-October to stop what the EU called "illegal practices" on contracts with handset manufacturers that push its services in front of users.
The company faces daily fines of 5% of revenue if it doesn’t obey.
The penalty - the same amount the Netherlands contributes to the EU budget every year - is far higher than any other dished out by the US, Chinese or other antitrust authorities.
The US is unlikely to match the European Union’s fine. Antitrust regulation is divvied up by the Federal Trade Commission and the Department of Justice.
While new FTC chairperson Joseph Simons told Congress on Wednesday that the agency will review the EU findings closely, the same agency closed its own probe of Google years ago.
EU Antitrust Commissioner Margrethe Vestager’s fine on Google comes just a year after slapping the company with a €2.4bn penalty for thwarting online shopping rivals.
It’s the latest in a series of EU strikes on Silicon Valley giants that also included hefty back tax bills for Apple and Amazon.com, accused of receiving unfair fiscal deals from EU nations.
The White House did not respond to requests for comment after the EU fine was announced on Wednesday.
Trump said on Wednesday he was looking forward to a July 25 visit by EU Commission President Jean-Claude Juncker, who is coming to the White House to discuss the trade relationship.
Trump, who is considering slapping tariffs on car imports from Europe, threatened “tremendous retribution” against the EU if the meeting at the White House doesn’t go well.
“If we don’t negotiate something fair, then we have tremendous retribution, which we don’t want to use, but we have tremendous powers,” Trump said Wednesday during a Cabinet meeting at the White House. “We have to. Including cars. Cars is the big one.”
For its part, the EU is preparing a new list of US goods to hit with retaliatory measures Trump moves ahead with the car tariffs.
“If the US would impose these car tariffs that would be very unfortunate, but we are preparing together with our member states a list of rebalancing measures as well,” EU trade chief Cecilia Malmstrom said on Thursday.
Juncker will bring two main negotiating proposals in an effort to tamp down the escalating trade tensions: an offer to discuss the reduction of levies on cars and car parts among all major auto-exporting countries, and the possibility of broaching a limited free-trade agreement, according to an official with knowledge of the EU’s thinking.
Trump frequently tweets on companies, sometimes moving their share prices in the process. Thursday’s Google message came hours after he thanked Swiss drugmaker Novatis and rival Pfizer for not raising prices on prescription drugs.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER