Recently, analysis has emerged that the escalating global tariff war originating from the United States may expand into the service sector. While there are practical constraints, the likelihood of targeting the U.S. big tech industry through enhanced regulations such as "digital taxes" is substantial.
On the 30th, DB Financial Investment analyzed that while the current trade war mainly focuses on goods, the service sector cannot be overlooked. The U.S. is the largest service exporter and consistently records surpluses in services, making it likely for other countries to consider limiting the U.S. service industry as a means of tariff retaliation.
Park Seong-woo, a researcher at DB Financial Investment, noted, "Services such as cloud, advertising, software, and content provided by Google, Microsoft, Meta, Amazon, and Netflix are major sources of revenue for the U.S. economy and offset the merchandise trade deficit." In fact, according to statistics from the World Trade Organization (WTO), the annual U.S. service trade surplus nearly reached $300 billion (approximately 441 trillion won) last year.
The researcher explained, "Given that U.S. technology corporations have strong market dominance worldwide, countries with insufficient retaliation measures in merchandise trade may consider targeting the U.S. service sector for retaliation."
Service trade can erect barriers through regulations and legal measures. This could involve demanding additional taxes from U.S. information technology (IT) corporations in the form of enhanced digital service taxes or increasing the regulation level of data management and restricting the use of intellectual property rights, such as patents and copyrights, held by U.S. companies.
DB Financial Investment predicted that technology corporations like Google, Amazon, and Microsoft could become primary targets of retaliation measures. However, the U.S. can manage the risk of retaliation through various means, including international negotiations like the General Agreement on Trade in Services (GATS), legal responses, and financial sanctions.
The researcher stated, "While the possibility of large-scale service trade retaliation targeting U.S. big tech is low, there remains room for passive responses in the form of strengthening digital service taxes and intellectual property rights."
There is also a possibility that U.S.-led service trade could serve as a means to mitigate the conflicts in goods trade. If the trade war expands into the service sector, it could have a significant impact on the global economy, including the U.S. Consequently, regions outside the U.S. may utilize measures like digital taxes on big tech companies as a card to alleviate tariff conflicts. A recent example is India's push to abolish the Google tax ahead of mutual tariffs.
The researcher highlighted, "The Trump administration's policy logic, which aims for protective trade in goods and free trade in services, is quite contradictory, stating that unless the trade war spreads dramatically into the broad service sector, the U.S.-centered global service trade structure could serve as a buffer against the intensification of trade disputes in the goods sector."