Transatlantic relations were hardly flourishing even before Apple was slammed with a €13,000,000,000 tax bill by the European Commission yesterday.
Such is the awkward standoff between Washington DC and Brussels that the move was pre-empted in America last week, with the US Treasury accusing the EC of becoming a “supranational tax authority”.
The tax tiff must not be viewed in isolation, but as part of a broader series of disputes. American officials accuse Europe of picking on the biggest and most successful US companies, especially its tech giants. Google, for example, was subjected to a dramatic tax raid in Paris earlier this year, and is facing fresh assaults from antitrust regulators, over everything from its advertising business and its shopping services, to how it displays publishers’ content. Facebook, too, is caught up in these probes.
And it’s not only European authorities who are accused of overstepping the mark. US mega-fines dished out to Europe’s banks have been so severe that the Eurozone’s central bank fears they could become a threat to the continent’s financial sector. The size of Apple’s new tax bill may be eye-watering, but is not much bigger than the $9bn fine handed to BNP Paribas because its business in Iran fell foul of US restrictions. France was outraged by the BNP fine, and America’s government appears to be equally unimpressed by Europe’s treatment of Apple. Yesterday’s decision “undermines... the important spirit of economic partnership between the US and the EU,” its Treasury said.
Some people have suggested that the UK, post-Brexit, could benefit from an EU-US standoff by attracting companies deterred by Brussels’ heavy-handedness – but while this would be some consolation, the wider picture is little cause for cheer.
Economic relations between the two continents, broadly seen as the bastions of liberal democracy and free trade, are absolutely crucial to global prosperity. Authorities on both sides of the pond have a responsibility to police their markets, but they must adopt a far more constructive and diplomatic approach. A prolonged period of political bickering can only have a negative effect on workers, consumers and taxpayers in Europe and the US alike.