Countries around the world might soon hit back at the United States by slapping 19% tariffs on American services, according to a recent report by a British publication. This potential move aims to address ongoing trade imbalances and could put leading U.S. firms in the crosshairs.
While the U.S. has long faced a trade deficit in physical goods, it’s a different story with services. Last year, the U.S. enjoyed a $295 billion surplus in services trade, excelling in areas like cloud computing, logistics, and financial services.
Governments have several ways to make it harder for U.S. services to operate abroad, such as imposing stricter regulations, launching antitrust investigations, or adding extra taxes on foreign firms. However, these steps could also harm their own economies and consumers, much like how U.S. tariffs on imported goods might negatively impact Americans.
Michael Froman, a former U.S. trade negotiator and current president of the Council on Foreign Relations, wonders if the current administration will use tariffs as a bargaining chip or stick with them regardless. If the U.S. maintains its trade barriers, other nations might retaliate by targeting the very services that make American companies leaders on the global stage.
This brewing trade tension raises important questions about the future of international cooperation and the global economy, especially for young people in the Global South who are increasingly connected through technology and services.
