Ask HN: Is there a risk of e.g. AWS/GCP services getting "tariffed" in Europe?
The White house has recently communicated its desire to impose onto Europe a "25% tariff on cars and all other things":
https://www.bbc.com/news/articles/c05ml3q2gn7o
Now, Europe doesn't really buy that many things from the US. What we do buy is services. For the HN crowd this generally means e.g. AWS/GCP services.
I work for a EU company with a (un)healthy AWS spend. Workloads are all in EU zones.
What is the likely outcome here, in case the EU decides to put some kind of "tariffs" on digital services from the US in their inevitable response?
Would AWS likely be able to avoid those tariffs for non-US workloads?
If you are using primarily EU based AWS data centers then I would expect no impact. I would imagine that Amazon (and Google and Microsoft) have EU based corporate entities that own and operate the EU services so in reality your company probably doesn't interact with the US Amazon corporation but a subsidiary.
Would Google have to pay a tariff it a subsidiary needs a good or service from the mothership (or vice-versa)? Presumably yes, which would complicate the situation.
You're probably not paying Amazon (US) directly, but instead their European subsidiary. Amazon (EU) is the importer buying services from Amazon (US) for a fee. If that fee gets taxed, Amazon (US) could simply decide to charge nothing (or only a symbolic amount) until the trade spat blows over.
In the case where a European customer uses resources (and causes costs) in the US, there's a risk of losing money if the "tariff" never goes away, so they would likely have to raise prices for that use case to account for the risk.
If a European customer only causes costs in Europe, that risk is nil, so there wouldn't be a need to raise prices, but Amazon could decide that it's a good excuse to do so anyway.
Thanks for the analysis.
I could imagine the US gov insisting that AWS development/operational expenses occurred in the US be "tariffed" to some proportional degree.
Bezos paid his bribe at the inauguration. If that wasn't enough, he'd probably just donate more rather than risk tariffs.
A bunch of European companies did the same, so I wouldn't consider that "a done deal".
In the end, who knows.
In any case, choosing local EU services seems better. At least have a contingency plan or go multi-provider if you are a big enough company.
- https://european-alternatives.eu/
- https://github.com/uscneps/Awesome-European-Tech
I'm guessing e.g. "managed kubernetes in EU" will get quite competitive.
Cheeto Mussolini can proclaim whatever he wants. AWS/GCP/Azure/OCI all have business entities registered in the EU, that the regions are registered under, and they all have the lawyers to back that up, so no.
The current tariff discussions are about imports into the US.
And for at least the value of the paper it is written upon, the US Constitution prohibits taxes on exports.
So I think it is unlikely that an AWS price increase for Europeans would go to th United States Treasury. Bezos pockets sure, Treasury no.
Good luck.
Most contracts in EU are with MS Ireland or Google Ireland or xyz Ireland. So 'tariffs' will not affect the pricing per se. What will get weird is when Google will decide to expand their DC or replace X number of hardware, in which case they will ask mamaGoogle to sell to Google Ireland the hardware. Would there be tariffs? (when a company transfers assets to a subsidiary?)(I think not)(someone please correct me)
Tariffs apply to imported _goods_. Services like software are not imported goods.
What we are discussing is:
Tariffs are just a kind of tax, so this objection doesn’t really change anything because the EU isn’t required to respond in exactly the same manner if the United States started a trade war. They could pass a tax on services indexed to the US tariff rate, for example, and from the buyer’s perspective there would be no difference.
Tariff has a specific meaning. What you're referring to would be a tax/fee rather than a tariff.
Tariff is for imports/exports of goods.
I think you might have misread my comment: I used “tax” hoping to avoid this kind of valueless pedantry. This isn’t a board game where the EU is going to say “darn it, I can’t do anything because only have goods counteractions and you have services!”, they have plenty of smart economists and lawyers who can plan corresponding taxes to rebalance things.
Hence the scare quotes. This seems like an unusual situation.
It's unusual in that it is being done. But tariffs are paid for by the importer to the customs agency that is handling the good at the port of entry. Customs doesn't handle services.
The BBC article you linked also points out that it is for goods.
The risk I'm considering is that the EU may need to wade into involving services in its response to reach parity.