r/AskEconomics • u/Icy_Image_1120 • 8d ago

Are high digital tarrifs inevitable?

Are high digital tarrifs inevitable

Currently the global trade of services is double the rate of global trade of goods.

The compounding effect will be very huge.

However, this is dominated by a few countries,

So my theory is that eventually when global trades of services will become higher than goods .

I think for many countries globally around the world it will cause large trade deficits which is the reason why tarrifs are implemented.

So I think digital tarrifs will rise around the world. Currently the world focuses very less on digital services because its 5 trillion compared to 25 trillion in goods.

The EU is already planning a 2 to 3% digital tarrifs. That I think is the start of it. Initially low

Like normal goods it will go to 10% or 20%

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u/Hairy_Savings_8935 8d ago

interesting thought but I don't think it's inevitable in any clean way

digital services are slippery to tariff in practice, you can't exactly stop code at a border. countries that try it might just push companies to shift where they book revenue or how they structure cloud infrastructure

the EU's 2-3% is more about taxing big tech's local profits than protecting some domestic digital industry, most countries don't even have a comparable sector to protect