For once, everyone in Washington agrees: Congress, the administration, and even the Republicans and the Democrats. They are all concerned, alarmed even, about the European Union’s latest tax investigations, which have put major American corporations like Apple, Starbucks and Amazon in the European Commission’s crosshairs. Money and power are at stake, with potential back taxes reaching the double-digit billions.
Washington is already threatening “retaliatory action,” but has not provided details about what that might mean. The Americans are maximizing their attempts to intimidate the Europeans by keeping details of any possible escalation vague. What began as a European investigation into suspicious models for subsidies has turned into a serious burden on transatlantic trade relations. There is even talk of a “tax war.”
Several years ago, the Americans went so far as to describe a World Trade Organization decision in favor of the E.U. as an “atom bomb.” But the explosive force could be bigger this time, because the current dispute is occurring at a time when chauvinism and economic nationalism are being revived on both sides of the Atlantic.