European Union "hands olive branch" to Trump administration to drop digital tax plan

On July 12, according to Politico, the European Union Commission has abandoned plans to tax digital companies, marking a major victory for US President Donald Trump and US tech giants such as Apple (AAPL. O) and Meta Platforms (META. O). The document shows that Brussels has removed the digital tax option from its seven-year fiscal plan launched in 2028 as trade talks between Europe and the United States enter the final sprint. Top European Union officials are in key negotiations over the budget plan, just days before the budget is announced. The policy shift is a significant shift for the European Union, whose 27 commissioners discussed a budget document in May that also mentioned the idea of taxing tech giants to pay off European Union debt. The sharp turn could be a strategic move by the European Union, which is desperate for favourable trade terms with the US and Mr. Trump has previously threatened retaliatory tariffs on Canada to counter its digital tax policies.