US considers Section 338 tariffs against EU over digital regulations

The potential application of Section 338 tariffs signals a shift where digital regulation is treated as a direct trade provocation. For streaming and tech giants like Apple and Meta, this elevates compliance costs from simple legal fines to broader supply chain and trade risks. This strategy forces the EU to choose between sovereign regulatory enforcement and maintaining stable economic relations with its largest trading partner. As the US-Canada trade dispute escalates, the streaming industry must prepare for increased volatility in transatlantic data and service flows. Watch for the results of the Pentagon’s force presence review in Europe, which may serve as additional leverage in these trade negotiations.

The Digital Markets Act and Digital Services Act have already generated significant enforcement activity against major US technology companies, creating the friction that Section 338 tariff threats now amplify. In March 2025, the European Commission fined Apple €1.8 billion for restricting music streaming competition, its first DMA penalty, targeting anti-steering provisions that prevented Spotify from directing iOS users to cheaper subscription options outside the App Store. Meta has faced parallel scrutiny under the DSA, with EU regulators opening formal proceedings in April 2025 into Meta's compliance with transparency obligations on Facebook and Instagram, focusing on addictive design features and inadequate age verification. These enforcement actions form the factual basis that US trade officials now characterize as discriminatory barriers rather than routine regulatory enforcement. The broader US-EU trade relationship has deteriorated sharply in 2025, with digital regulation becoming one front in a wider confrontation. The US Trade Representative's office published a report in March 2025 identifying the DMA and DSA as potential unfair trade practices, marking the first time these regulations appeared in the annual National Trade Estimate Report as formal trade barriers. Section 338 of the Tariff Act of 1930, which has never been invoked, grants the president authority to impose tariffs of up to 50% on imports from countries that discriminate against US commerce. Legal scholars at the Brookings Institution noted in June 2025 that invoking Section 338 would face immediate legal challenges because the statute predates modern trade law frameworks and may conflict with US obligations under the World Trade Organization, though the current administration has shown willingness to test untested statutory authorities. For streaming and digital services companies, the tariff threat introduces a new category of risk beyond compliance fines. Apple and Google have both increased EU lobbying expenditures in 2025, with Apple spending €4.5 million and Google €6.25 million on Brussels-based advocacy, according to the EU Transparency Register. The potential for retaliatory tariffs on hardware imports or digital services taxes could disrupt the economics of content delivery and app distribution across the Atlantic. Penny Naas, who leads the US Chamber of Commerce's digital trade policy work, warned in a July 2026 briefing that tariff escalation could fragment the transatlantic digital economy into competing regulatory blocs, forcing companies to maintain separate compliance stacks for each jurisdiction.