Should the European Union respond to U.S. tariffs with an “Amazon tax”? One European trade union federation thinks so.
In a letter last week to Valdis Dombrovskis, the Latvian politician who has been serving as European Commissioner for Trade since 2020, UNI Europa argued that American digital giants—its longtime adversary Amazon, in particular—have and continue to profit from unfair economic advantages in the world’s largest single market, including what it describes as disproportionately low tax rates and lucrative European taxpayer-funded public contracts.
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Oliver Roethig, UNI Europa’s regional secretary, said that Everything Store has gone years without making corporate tax payments from its Luxembourg headquarters despite making billions of euros in revenue. And while a 2017 ruling required Amazon to repay 250 million euros ($282 million) in back taxes, he said, subsequent court decisions have overturned it, “allowing Amazon to continue benefiting from these unfair advantages” when its European competitors are subject to rates two-and-a-half-times higher than the average 9.5 percent tax that U.S. digital companies like it shell out across Europe.
The Jeff Bezos-founded firm, through its Amazon Web Services arm, has also won more than 1.3 billion euros (nearly $1.5 billion) in public tendering between 2019 and 2021, along nearly 30 million euros ($34 million) in contracts with different EU Directorate-Generals from 2020 to 2022, though these may be just the “tip of the iceberg,” Roethig added. He said that this, again, signaled the economic leg up Amazon has over many of its competitors, “most of whom respect fundamental European values of social dialogue and collective bargaining,” allowing it to “cross-subsidize social dumping in its logistics and e-commerce operations.”
“Amazon is the most egregious example of this double injustice,” he said, noting that a digital services tax on the e-tail juggernaut and its ilk would “level the playing field and protect Europe’s social model.” Citing numbers crunched by the Center for European Policy Studies, Roethig said that a 5 percent levy could net an additional 37.5 million euros ($42 million) in annual income that could be invested into “Europe’s economic future and protect its workers from the fallout of the trade war.”
The European Commission did not respond to a request for comment. An Amazon spokesperson declined to respond to UNI Europa’s letter but said the e-tail juggernaut opposes unilateral services taxes, adding that “we’ve consistently supported the OECD Inclusive Framework’s consensus-based efforts, and we’ve welcomed the continued standstill of unilateral digital services taxes from other countries.”
The missive comes amid escalating trade tensions between the United States and the EU, which threatened on Monday to initiate tit-for-tat 25 percent levies on 21 billion euros ($24 billion) of U.S. goods, from apparel to toilet paper to soybeans, if the two cannot agree on a “zero-for-zero” tariff deal on all industrial goods, including cars.
The 27-member bloc has so far paused any counter-tariffs on the United States, including against the 25 percent duties that the Trump administration imposed its steel and aluminum exports last month, for up to 90 days—the same amount of time that the Trump administration will be holding back its 20 percent “reciprocal” tariffs on the EU in favor of a flat 10 percent import tax. So far, the two economic giants have failed to come to a detente over what the EU has described as “unjustified and damaging” tariffs that risk bruising both sides and the broader global economy.
“We want to give negotiations a chance,” Ursula von der Leyen, president of the European Commision, said in a brief statement last week. “If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.”
