European Commission is licensed under Creative Commons.
In two months, the United States will mark 250 years since declaring independence from European taxation. Yet today, European governments are once again targeting American companies — this time through discriminatory Digital Services Taxes (DSTs) explicitly designed to hit large U.S. tech firms.
In a new piece for RealClearMarkets, Americans for Tax Reform’s Director of Innovation Policy James Erwin explains how Europe’s failure to foster its own tech sector has led governments to treat successful American companies as a cash cow for their welfare states.
U.S. firms already pay nearly $3 billion annually in DSTs, a figure projected to reach $9.6 billion by 2030. Combined with massive compliance costs and other regulations like GDPR — where 83% of fines have hit American companies — these policies function as a wealth transfer from American innovators to European treasuries.
The piece highlights how Europe’s precautionary regulation and over-taxation prevented the creation of any major homegrown tech platforms (with the sole exception of Spotify), while America built the companies consumers actually want. Rather than reforming their own burdensome rules, European leaders export the problem through discriminatory taxes and regulations — now spreading to Latin America, including Brazil’s DMA-style Bill 4675/2025.
Erwin urges the Trump Administration to treat these non-tariff barriers as the serious threat they are, making repeal of discriminatory DSTs a non-negotiable part of any trade negotiations.
Read the full op-ed here.
