It would be a just a hefty fee for most EU companies and not much more. From what I've seen Azure is pretty popular in most bigger companies and smaller shops and websites use often AWS or Google cloud. Microsoft Windows and Office is also everywhere - it would be a tax on European business with little effects on the USA because moving away from big clouds won't happen because there is no realistic alternative.
Last I've looked "Lidl Cloud" from Schwartz-IT that is often mentioned as alternative is basically managed Kubernetes for more than double the price of Azure/AWS before rebates. They have that idiotic meaningless TÜV button on their websites and unfortunately it's not technical excellence but rather a trap for boomer CEOs...
Europe missed that boat unfortunately and I don't see that changing soon. Hetzner/OVH and so on only provide bare metal or virtual machines for little money but there is no European cloud with serious IaC and managed services that are stable and battle tested as far as I know.
Changing taxation rules is the interesting topic but unfortunately EU countries are competing on that and that would destroy the business model of countries like Luxembourg or Ireland - I'm all for changing it and it would be better in the long-term but it's probably impossible to pull off at the moment.
It seems to me that replacing foreign computer services is actually easy compared to physical goods: no need to build factories, no need to buy expensive machinery etc, just wrap some open source solution and sell it. For example, China has domestic computer services, from messengers to AI models. And by observation, once you ban foreign services, local competitors start appearing like mushrooms after rain.
It's this attitude that is common in Europe, at least in Germany that is the reason we are so behind. Worked for so many companies that just wrapped some open-source and sold it. Never worked well, nobody understood how it worked. No money for competent devs and so on. Both times the product was what made the company money. Say what you want about USA tech companies but at least some actually have technical excellence. I've lost hope that Europe, especially Germany will understand that.
Yeah sure but then you do promote EU alternatives out of necessity.
On the long term this can really make EU more sovereign, less dependent and it's not a crazy thing.
I have never understood the argument of "yeah tariff would hurt us because we are dependent on foreign tech". Yeah that's precisely a problem at a country level. Promoting local alternative is best than winner takes all.
There's also a price in not looking tough when you're getting bullied sometimes.
Both OVH and scaleway provide managed k8s (and both have terraform providers). But yes, definitely much less sophisticated than the hyperscalers. But if you use k8s, maybe s3 and Kafka, and some databases, it's definitely possible to do the switch.
Swapping an enterprise’s cloud provider is at least a 6 month endeavor and that would be with all hands on deck, I estimate two years at least and that’s still with significant tail wind. While things are crazy, best bet is to hold tight and sign the checks and prepare.
My experience is that it can be anything from relatively easy to frocking impossible. Very hard to put a timeline on.
But if we are talking about tariffs (and not a ban) then a partial move is also relevant. And, at least in my anecdotal experience, a non-trivial fraction of our cloud-cost is pretty simple services which can be moved. It's almost like a 95/5 kind of thing, moving 95% of the stuff would take 5% of the time.
Having a hybrid cloud setup is clearly more hassel, but it's doable.
Say an American multinational like Microsoft provides some SaaS. They have a division in Europe where their developers help make their products. They have offices, customer support, servers, etc. in Europe. Do they pay a partial tariff based on what fraction of the development of their software happened in the US? What if they sell the rights to the European version of their software to their European division?
It would need to be a tax on money transfer to the American counterpart. Cash repatriation or payment for IP rights comes to mind.
Of course, the multinational could also use the funds to invest in Europe, build warehouse or commercial real estate or acquire European startups. I think they already do this to some extent to avoid US tax.
Using these to fund free credits to European cloud providers could be a good way to build up a local alternative. I think we underestimate the importance of free credits in the reliance on the 3 US hyperscalers, especially for startups.
Some part of me feels like (and hopes?) this could create a golden era for tech in the EU. Competing operating systems, productivity software, SaaS solutions. If I had any say in the EU right now, I'd look at ways to increase visa access for disaffected tech workers looking to leave the US turmoil.
If you have a job offer for 50k and a university degree you can get an EU "blue card". Went through the process and it's pretty easy, I don't think this visa is a big issue for tech workers
> If I had any say in the EU right now, I'd look at ways to increase visa access for disaffected tech workers looking to leave the US turmoil.
We're lacking VC funding, not skilled tech workers. Increasing visas for tech workers without increasing the funding just lowers wages which are already low.
That might be true, I wouldn't know -- but I do know a lot of EU countries have visas for skills shortages and software is listed among those skills. I assumed that meant there's an opportunity to expand and expedite access if the need was more imminent.
Just because companies say they have skilled shortage doesn't make it true. They're mostly just picky and want to put pressure on wages. I also have a Ferrari shortage, so we need to make more Ferraris.
Plus, EU visas are basically just rubber stamps anyway compared to how hard getting an H1B is.
Actually here's another unused pressure point, the EU can retaliate by making it as difficult for Americans to work in the EU as it is for EU citizens to work in the US. Why isn't it already reciprocal?
What I don't understand is why other countries didn't make the threat to make any tariffs hold for a year or longer. That would scare Trump away from doing these stupid experiments.
Why would other countries inflict that sort of self harm? It would be a bluff, and everyone knows it. If it wasn't a bluff, you would be out next election.
There is something to be said for stable economic policy making. EU could say that they're not going to be a leaf in the wind, and it would be a totally understandable position.
The whole point of imposing retaliatory tariffs is that it puts pressure on the aggressor to give up, on the basis that you will then immediately drop the retaliatory tariffs. The point is to produce a quick end. Retaliatory tariffs with a _minimum_ duration would be counterproductive.
I suppose you could have a kind of tariff equivalent of the doomsday machine from Dr Strangelove, in principle; a set of automatic measures to come into force if the adversary does [whatever]. However, Trump strikes me as a bit of a General Ripper, so it might not be a _great_ idea.
The EU effectively backdoors tariffs against US software vendors via fines and the occasional if ineffective subsidy for local competitors in the local language.
No, fines are for breaking the law, if they don't break the law there's no way for the EU to collect the money. It's like speed traps, people can be mad at them because they broke the law and were caught, it doesn't alleviate the fact they could have just followed the rules.
They have laws like GDPR where they try to assert jurisdiction outside of their borders. Not sure if fines collected through that have been a significant cost of doing business but my point is they definitely can take money from you in situations where you aren't breaking laws that you are nominally under the jurisdiction of.
Yes but only for the sake of the business conducted in that jurisdiction. The GDPR, according to the EU, applies to anybody anywhere in the world. You can have information on an EU citizen stored outside of the EU and they can fine you under GDPR. You don't even need to have ever been to an EU member state at any point in your life-they still claim to have jurisdiction over you if you have information stored on a computer they want deleted.
Most foreign extradition courts would laugh in their face for trying to use that, but if you have any assets in the EU (as most corporations inevitably will if they get big enough to go international) they can seize those as punishment for not following EU laws related to business conducted outside of the EU and that goes back to what OP tried to argue:
>if they don't break the law there's no way for the EU to collect the money
they actually can, because they can say you broke their law while conducting business outside of their jurisdiction that wasn't even illegal in the coutnry that actually had jurisdiction over that transaction.
Collecting something of value as a condition of service is conducting business. It was decided years ago the a transaction's location is the payer's location. Collecting information with or instead of money does not change this. Moving money or information to another jurisdiction and using it there does not change this.
GDPR covers people in the EU. Not EU citizens. Non EU companies can avoid GDPR liability complying with the law or not conducting business there.
Global companies have assets in the EU because they conduct business in the EU. International companies which do not conduct business in the EU do not have assets in the EU generally. And having assets in a jurisdiction subjects you to the laws of that jurisdiction obviously.
Sadly this is not the case in relation to EU laws.
In the US system of law, it is based on codified "rules". If you follow the letter of the rules you are fine - no fines.
The system of regulation at play here is the EU digital markets act. These laws are based on the effect of your actions, not the specific actions you undertake.
If the effect of the steps you take produce unacceptable outcomes, you pay fines even if you follow the requirements. The converse applies as well. If you ignore the rules but the outcome is in the spirit of the laws, then no fine.
The idea is to avoid malicious compliance but the cost of this is ambiguity in interpretation and also the market response to your actions might be genuinely surprising.
Here is a technical example to highlight the problem:
Apple were asked that you should allow independent browser technology implementations. They did this (to allow Google's technology to be employed as an example).
But due to practical complexity they could not make progressive web apps work on iPhone (since they would need to route through the API which can be provided by Google's browser technology). So to comply with the rules, Apple disabled full screen PWAs and instead allowed them instead the web view area inside a browser, not full screen like a native app is experienced.
The EU regulatory body said revert that, and allow PWAs despite their own rules being then violated (as it would be using only Apple's browser technology) because the effect of allowing PWAs is a competitive marketplace for native app alternatives (web apps).
I prefer a system of rule of law that covers the spirit of the law rather than the letter.
I do not like the idea that law can become a game of finding loopholes that go against the spirit of it, it's whack-a-mole that costs the State a lot to keep patching. I much rather have the system most of the EU has where subjectivity can play into decisions since some loopholes can be clever enough to work around terminology, jargon, and non-specificities to skirt around what's written while being opposed to the intent of the rule.
Companies can still contest, and bring forth cases to be reviewed to check if those solutions comply with the law, their lack of cooperation is a choice to drive a wedge between the citizenry and the regulations by non-complying and crying foul to the public to gather sympathy. That's an active choice, the companies could work with regulatory bodies to cooperate, and find a solution (I work at a company who did that for DSA) but most would much rather give a bad rap to regulations to turn the public against it.
What's a better system that allows patching loopholes of the letter without requiring extensive bureaucracy and potential gridlock in legislature?
There's no mind reading, most of EU's fines only happen after a pattern of non-compliance, complain as much as you want about EU's bureaucracy but it's quite cooperative if you want to figure out a solution. I prefer this system than one where the written laws are worth nothing since well paid corporate lawyers can figure a way out, or hell, they might even be paid to write the laws themselves as it happens in the US.
=> subsidy for local competitors in the local language
I'd like to know if you know what's you're talking about. In france the local subsidies are really low and the inversely the big rebates like "Tax Credit For Research & Dev" are for everybody, US companies like EU ones.
US has an imbalance on goods that was used to calculate the tariff amount, but it has the opposite imbalance on service from what I've read