The international trade chessboard is heating up again. As an IT Procurement professional, I find myself watching the return of global tariffs with a mix of déjà vu and concern. Not long after a tumultuous trade war shook supply chains a few years ago, we’re now seeing a new chapter unfold: U.S. President Donald Trump has unveiled sweeping “reciprocal” tariffs on imports worldwide, and the European Union is gearing up to hit back – this time taking aim at American tech and software. The situation is evolving rapidly, but one thing is clear: these high-level tariffs and threats could trickle down into very real challenges for those of us negotiating IT contracts and managing vendor relationships.
In this article, I’ll break down what’s happening with Trump’s global tariffs and the EU’s response, and more importantly, explore what it all means for IT Procurement. I’ll blend general analysis with personal perspective from the trenches of enterprise IT buying. From hardware supply headaches to SaaS in the crossfire, and from real Procurement examples to strategies for navigating uncertainty, consider this a practical look at trade tension through the eyes of a senior IT Procurement partner. Let’s dive in.
A new global trade war unfolds
In early April, President Trump dramatically escalated trade tensions by announcing broad tariffs on virtually all U.S. imports. Dubbed “Liberation Day” by the White House, the policy imposes a minimum 10% tariff on most imported goods, with an even steeper 20% rate targeted specifically at imports from the EU . This marks one of the biggest trade gambits of his administration – a “reciprocal” tariff strategy aimed at what Trump views as unfair trade balances. Essentially, Washington is “levelling the playing field” (in Trump’s view) by matching or exceeding the barriers it believes U.S. exports face abroad.
From my desk in France, I remember reading the news alert and thinking “Here we go again.” As an IT buyer, I’ve seen how these tariff crossfires can impact everything from the cost of server hardware to the stability of supplier relationships. It’s not just abstract geopolitics; it creates real budgeting and planning headaches. This time, the scope of Trump’s tariffs is truly global – not just singling out China or Mexico, but hitting allies and rivals alike. For the EU, a 20% blanket tariff on its exports to the U.S. is a big deal, and it didn’t take long for alarm bells to ring in Brussels.
European leaders quickly condemned the move, warning of a return to a full-blown trade war. Ursula von der Leyen, President of the European Commission, vowed to “prepare countermeasures” and emphasised that Europe “holds a lot of cards” and is ready to take firm countermeasures – all instruments are on the table . In other words, the EU is not planning to take these tariffs passively. A French government spokesperson hinted that EU retaliation could go beyond goods into services – notably digital services – by the end of the month . This caught my attention: tariffs on steel or autos are one thing, but when we start talking about digital services, we’re entering my world – the technology sector.
To put the dispute in context, it helps to understand each side’s perceived grievances. The Trump administration argues that Europe and others have long enjoyed asymmetric trade benefits and non-tariff barriers. For example, Trump has criticised the EU’s 10% tariff on car imports (versus the U.S.’s 2.5% car tariff) and even counted Europe’s ubiquitous value-added tax (VAT) and strict food safety rules as de facto “tariffs” in his 39% effective tariff claim . The EU, for its part, points out that actual tariffs between the two economies are quite low on average – roughly only 1% on goods each way across the Atlantic – and that U.S. exporters often benefit from selling into the EU’s single market. In fact, when you include services, transatlantic trade is roughly balanced overall (the EU’s surplus is only around $50 billion on ~$1.7 trillion total trade) . However, that balance hides an important asymmetry: the EU runs a big surplus in goods while the U.S. runs a surplus in services. And this is exactly why Europe’s retaliation is homing in on tech and other services – it’s America’s “Achilles’ heel” in trade terms.
Europe’s threat: targeting Tech and Software
Rather than simply mirror Trump’s tariffs on goods dollar-for-dollar, the EU is signaling it may “swap battlegrounds” and target U.S. technology firms, software suppliers, and financial services. Up to now, Brussels has played by the traditional playbook – responding “blow for blow” with tariffs on Harley-Davidson motorcycles, bourbon whiskey and other iconic American goods . But as one EU diplomat put it, “If Trump imposes reciprocal tariffs, we are entering a whole new game.”
The new game could get very personal for Silicon Valley and Wall Street. Europe is acutely aware that U.S. tech giants – the likes of Microsoft, Google, Amazon, and Elon Musk’s platform X – are deeply embedded in European business and society . This gives the EU leverage if it chooses to tighten the screws. We’re essentially hearing Brussels hint: “We buy a lot of your software and digital services – and we can regulate or tax them harder if provoked.” For someone like me who negotiates enterprise software deals, that hint cannot be ignored.
So what exactly might the EU do? Officials have floated a range of countermeasures, and none of them bode well for American IT suppliers:
- Restricting U.S. firms in public tenders: The EU’s new International Procurement Instrument (IPI) is one tool on the table. It would allow Brussels to bar or limit American companies from bidding on EU public sector contracts if the U.S. is deemed to be unfairly shutting out EU firms . Imagine European governments and agencies suddenly unable to sign new deals with U.S. software vendors or cloud providers – a major revenue hit for those companies, and a Procurement shake-up for the public sector.
- “Digital levies” and taxes: European policymakers have long debated imposing digital service taxes on big U.S. tech firms. Now those ideas are resurfacing as a retaliation method. We could see special levies on Silicon Valley giants or other taxes that make providing software services in Europe more expensive for American firms. From a corporate buyer perspective, that might translate to higher prices passed down to us as customers.
- Tightening tech regulations: The EU has already enacted sweeping tech regulations (e.g. the Digital Markets Act and GDPR privacy rules) that U.S. firms must comply with. In a tit-for-tat scenario, Brussels could enforce these even more stringently or craft new rules to hamper dominant foreign vendors . Slowing down the licensing or operations of American software companies in Europe is a possibility . As an IT buyer, I worry about anything that could, say, delay a new software rollout or complicate our licensing because the vendor is caught in regulatory limbo.
- The “bazooka” – cutting off services: Perhaps the most extreme option: the EU’s recently approved Anti-Coercion Instrument (ACI). This is described as a “trade bazooka” for a reason. If activated, it allows the EU to target services and even block economic activities of a offending country . For example, Brussels could **suspend intellectual property rights of U.S. tech firms, halt their dividends from Europe, or even “pull the plug” on certain platforms . One trade expert noted that, in a serious clash, “I wouldn’t be surprised if the first victims are the American tech industry.” In practical terms, ACI could go so far as to prevent European customers from making payments for U.S. software subscriptions or cloud services, effectively shutting down those revenue streams . As someone who manages SaaS subscriptions crucial to my business, that scenario sends shivers down my spine.
Reading through these potential countermeasures feels a bit like reading a disaster plan for the transatlantic tech ecosystem. Could the EU really block Microsoft, AWS, or other essential suppliers? It sounds extreme – and indeed, many European industry voices are urging caution. BusinessEurope, the EU’s largest business lobby, warns that “our economies are so intertwined… even if you impose tariffs or any other measure on the services side, you will be hurting your own interest.” In other words, an overly aggressive retaliation on U.S. tech could hurt European companies (like mine) just as much by disrupting the tools we rely on. I share that concern wholeheartedly. It’s a classic case of cutting off one’s nose to spite the face – if Europe locked out major American software providers, we’d scramble to find alternatives and patch systems in the interim, a costly and risky endeavour.
At this stage, EU officials stress they hope to negotiate a settlement before things spiral. EU trade ministers are meeting to discuss “smarter, targeted retaliation” that maximises political pain in the U.S. while minimising collateral damage in Europe . Perhaps measures like focusing on specific states or industries, or delaying implementation to allow talks. Nonetheless, as an IT Procurement lead, I have to plan for the worst even as I hope for the best. Let’s break down how this brewing trade conflict could impact IT Procurement specifically.
Fallout for IT Procurement: from hardware to services
What do global tariffs and digital trade barriers mean for those of us buying technology? In a nutshell: potentially higher costs, harder negotiations, and an urgent need for contingency planning. Let’s unpack the key areas of impact:
- Hardware costs & supply chain: Tariffs are essentially taxes on imports, so hardware sourced internationally could see price hikes. For instance, a 20% tariff on EU goods into the U.S. could make European-made tech equipment (like certain networking gear or specialized electronics) more expensive for U.S. buyers; conversely, if the EU retaliates with tariffs on U.S. goods, American-made hardware could become pricier in Europe. Even though much IT kit is made in Asia, the global supply chain will reroute and adjust to these tariffs. We might see vendors relocating production to dodge tariffs – something that happened during the U.S.-China trade war when companies like Western Digital and Seagate shifted drive manufacturing from China to Thailand . Major hardware providers have been through this before: Cisco’s CFO noted in February that Cisco had already reduced its China reliance by 80% and mapped out scenarios to handle new tariffs , even considering a 25% import tax in worst-case plans. As a buyer, I interpret that as: hardware supply will continue, but lead times or logistics might wobble as suppliers rejig their supply chains. And don’t be surprised if vendors pass some costs onto customers – during the last tariff scuffle, Cisco and Juniper raised prices on networking equipment to offset tariff costs . I recall in late 2019 having to explain to my finance team why the quote for network switches had jumped – part of it was due to those behind-the-scenes tariff adjustments.
- Budget pressure & cost cutting: Beyond the direct cost of tech products, consider the ripple effects. If our company is in an industry hit by tariffs (say, manufacturing or retail with thin margins), overall budgets might tighten. I’ve seen this first-hand: when tariffs on raw materials or export markets hit our revenue, the CFO looks for cuts, and often IT spend comes under scrutiny. For example, a client in the automotive sector slashed their IT upgrade plans in 2018 when steel and aluminum tariffs drove up production costs. Procurement might be asked to renegotiate contracts, defer projects, or find cheaper solutions to help save money. This means any new initiative – whether upgrading laptops or investing in a new SaaS platform – faces tougher justification if it’s seen as a cost center rather than immediate ROI.
- Supplier risk & compliance: Perhaps the most complex impact is the heightened risk in dealing with suppliers across borders. Normally, when I evaluate an IT vendor, I consider factors like cost, functionality, support, and strategic fit. Now I have to add geopolitical risk to the mix. If I’m sourcing from an American software company, I have to think: Could this vendor become entangled in a US-EU trade fight? What if a new law suddenly restricts how we can use their product or share data? This isn’t theoretical – we saw something similar when the U.S. government banned American companies from selling to Huawei in 2019; any Western firms relying on Huawei telecom gear had to scramble for alternatives or exemptions. In the transatlantic context, it could mean European firms suddenly facing limitations on U.S. tech. Compliance requirements may also multiply. We might need clauses in our contracts about data localization (to comply with any new EU data rules aimed at U.S. providers) or clauses allowing termination if a service becomes illegal to use due to government action. In short, Procurement must assess country-of-origin and legal risks like never before, almost treating some vendor relationships like they’re fragile assets that governments could freeze.
I remember a recent internal discussion where a colleague half-jokingly asked: “Do we need a Plan B if we wake up and our Microsoft 365 access is revoked?” It sounds far-fetched, but with the rhetoric flying around, we’re at least considering such scenarios. That brings us to the area causing me the most sleepless nights: SaaS and cloud services.
SaaS in the crossfire: Cloud and Software under tariff threat
Software-as-a-service has been a godsend for my organisation – flexible, scalable, and cutting-edge tools delivered via the cloud. We run our email, CRM, ERP, and countless other apps on U.S.-based SaaS platforms. But now I have to wonder: Will trade tensions throw a wrench into our SaaS stack?
Traditionally, tariffs hit physical goods, not digital products. You don’t put a container of software on a ship. However, trade wars can absolutely target SaaS and software indirectly through regulations, taxes, and sanctions. Here’s how tariffs and trade restrictions could impact SaaS Procurement and usage:
- Regulatory uncertainty: As mentioned, the EU might use regulatory power as a bargaining chip – for example, slowing approvals or tightening rules for U.S. cloud providers. Already, European authorities have raised data sovereignty concerns about American SaaS. In France, even before this trade tussle, the government took steps to curb reliance on U.S. cloud services on sovereignty grounds. In 2022 the French Ministry of Education decided that public schools should not use Microsoft 365 or Google Workspace (even the free versions), citing data privacy and “digital sovereignty” concerns . If a friendly country like France is willing to limit foreign SaaS in certain domains during peacetime, imagine what a full-blown trade confrontation could bring. We could see official guidance to favor local or “sovereign” cloud solutions for government or regulated industries, or even mandates to switch providers if a service is deemed a security risk under the cloud of trade conflict. For companies, this means possibly having to swap out a trusted SaaS vendor to comply with new rules – a costly proposition.
- Data residency and segmentation: To keep serving European clients amid regulatory pressure, many U.S. SaaS firms are investing in local infrastructure. (Microsoft just announced a new EU Data Boundary to address European data concerns, for instance.) As a buyer, I now prioritize vendors who can store and process data in Europe, under EU law, untouched by U.S. jurisdiction. This isn’t just about GDPR compliance now – it’s about hedging against trade policy risk. If the EU were to say “personal data can’t leave Europe” or threaten to block services not compliant with X rule, I want the option to have my data stay on European soil. Savvy SaaS providers are highlighting such options as a selling point. In our RFPs, we’ve started asking: “Can you ensure our data and service would remain operational if transatlantic data flows were restricted?” It’s a tough question, but crucial in due diligence.
- Potential cost increases or service disruptions: While there’s no direct “tariff” on using SaaS, cost impacts can sneak in. If a trade war escalates, currency fluctuations could drive up the effective cost of subscriptions (a weakening euro against the dollar, for example, makes dollar-priced software pricier). More directly, if digital services taxes or levies are imposed, a vendor might add those as surcharges. We could also face service disruption risk if a company like Google or Amazon is targeted by an EU measure – perhaps slowing certain features or blocking new deployments until compliance is sorted. In the worst case, a tit-for-tat could lead to a service being suspended (imagine a scenario where an American company can’t legally provide a software update to EU clients because of a sanction – far-fetched but not impossible under the ACI toolkit ). The mere threat of this forces Procurement to have backup plans. For critical SaaS (communication, ERP), we are evaluating contingency options like alternate providers or even bringing some systems back on-premise if absolutely needed.
- Strategic shifts to local SaaS: Over the longer term, trade and regulatory friction might accelerate a trend already underway: Europe nurturing its own SaaS and cloud alternatives. As a European buyer, I see the appeal of home-grown solutions that wouldn’t be subject to U.S.-EU disputes. For instance, French cloud provider OVHcloud or German business software vendors might get a closer look purely because they’re insulated from transatlantic politics. I’m not about to rip out all our U.S. software – the ecosystems of Microsoft, Google, Salesforce, etc., are too embedded and generally excellent. But the balance might shift. In new Procurements, we’re more open to considering a European provider or an open-source solution if it means more certainty. The mantra is “don’t put all your eggs in one basket” – especially if that basket might be subject to an import tax or an export ban.
A personal anecdote: Last month, I was evaluating a U.S.-based SaaS analytics tool for our company. Normally, the decision would rest on features and price. This time, one of the questions from CEO’s are “Do we know if this company will be OK if the EU increases barriers on U.S. tech?” That was a first. It led us to ask the vendor about their plans for an EU data center and how they handle government access requests. The fact that we’re even thinking in those terms shows how Procurement is adapting. SaaS contracts now require a risk lens – checking for things like termination rights, data export provisions, and force majeure clauses covering government actions. I’ve even started adding a clause that allows us to exit or renegotiate if new tariffs/taxes significantly change the cost of the service.
In summary, SaaS is not immune to geopolitical strife. Trade policy used to be an outside factor for IT; now it’s very much part of our Procurement strategy. Next, I’ll outline how we can respond proactively.
Navigating uncertainty: strategies for IT Procurement
Confronting this uncertain landscape, IT Procurement leaders (myself included) need to be proactive. We can’t control presidential decisions or EU trade policy, but we can take steps to cushion our organisations against the fallout. Based on experience and industry conversations, here’s a practical playbook I’ve been using – a mix of risk management and smart sourcing:
- Stay informed and engage early: It sounds basic, but knowledge is power. I now keep an eye on trade news almost as closely as tech news. If a new tariff or rule is proposed, I want to know before it hits the fan. This also means engaging our suppliers in conversation. Don’t be shy to ask key vendors, “Hey, what’s your plan if these tariffs/restrictions come to pass?” Good suppliers like to show they have a handle on the situation – some might offer price guarantees or reassurance of supply. In one recent negotiation, we got a clause that locks in pricing for 12 months even if import duties rise, simply because we raised the concern. It never hurts to ask.
- Diversify the supplier base: Just as you wouldn’t rely on a single raw material source prone to disruption, don’t over-rely on one country or vendor for critical tech. This doesn’t mean uprooting established platforms, but consider secondary suppliers or backups. For hardware, that could mean approving multiple brands (so you have options if one gets hit with a tariff). For software, it could mean maintaining an alternate tool (even if smaller scale) that could take over in a pinch. Diversification also strengthens your hand in negotiations: if an American vendor knows you have a European alternative on speed dial (or vice versa), they’re more likely to accommodate concerns about pricing or compliance to keep your business.
- Embed flexibility in contracts: We’re used to negotiating service level agreements and volume discounts – now it’s time to negotiate flexibility. Work in tariff clauses where feasible (e.g., the ability to revisit pricing if exorbitant new taxes are imposed on the service). Avoid overly long lock-in periods without review clauses; a decade-long contract sounds stable, but not if the world changes drastically in year 3. I prefer 3-year contracts with renewal options and renegotiation triggers if regulations change. Also, ensure there are clear exit and data portability clauses for SaaS. If we had to switch providers due to a geopolitical issue, can we get our data out quickly and securely? I sleep better at night knowing the answer is yes.
- Focus on “sovereign” options (where sensible): Evaluate if certain sensitive systems should be kept on-premises or with local (home-country/EU) providers. For example, if you’re in a government or critical infrastructure sector, the calculus might favour a European cloud or a self-hosted system for key functions to avoid being caught in the crossfire. In our case, we decided to host our internal security monitoring tools on a French cloud service, even though it was slightly costlier than an American competitor, because it gave our data protection officer and legal team more peace of mind. Choosing a more geopolitically secure option can sometimes be worth the trade-off.
- Budget for the “tariff tax”: When planning IT budgets, it might be prudent to set aside a contingency for trade-related costs. Just as we buffer for currency exchange swings or inflation, add a few percent as “trade war contingency.” This can cover unexpected cost spikes or even expedite fees if you need to rush-ship equipment before a tariff kicks in. In late March, for instance, I pushed through an order of laptops slightly ahead of schedule upon rumors of new import taxes – it saved us 5% on that purchase versus waiting. Timing purchases around tariff implementation dates (when known) can yield savings.
- Collaborate and advocate: Finally, remember you’re not alone in this. Procurement professionals across industries are facing similar challenges. It helps to share notes within industry groups or professional networks. I’ve learned a ton by discussing with peers – one company’s strategy to, say, localise cloud instances, can inspire others. Additionally, if you have the opportunity, advocate through trade associations. Many tech buyer consortia or industry bodies lobby governments on these issues. Lending our voice – saying “these tariffs hurt us, please find a solution” – can contribute to pressure for a resolution. It might seem beyond our individual influence, but collectively the industry’s voice does matter.
Conclusion: balancing caution with resilience
As I wrap up, I find myself struck by the interdependence of it all. Global trade politics and IT Procurement may have lived in separate worlds before, but not anymore. In today’s environment, the senior IT buyer must wear many hats – part economist, part risk manager, part diplomat – while still delivering the right technology for the business.
From one perspective, the scenario is daunting: tariffs driving up costs, the EU and U.S. trading blows that could disrupt our carefully chosen tech stacks, and a fog of uncertainty hanging over long-term decisions. But there’s another perspective, one of resilience and adaptation. Our industry has weathered storms before – from the supply chain chaos of the pandemic to past trade tiffs – and each time we learned to adapt, innovate, and come out stronger. I’m encouraged seeing how quickly vendors like Cisco planned workaround strategies , or how SaaS firms are localising data for European clients to maintain trust. The wheels are already in motion to ensure that, whatever politicians do, the wheels of IT and commerce keep turning.
For those of us in Procurement, the best approach is to stay level-headed and proactive. We must neither ignore the risks nor be paralysed by them. In my own role, I’m communicating more with management about these issues, ensuring they understand why a diversification move or a contract tweak now could save headaches later. Surprisingly, these trade tensions have also humanised our supplier relationships – we’re talking about “what if” scenarios more openly, which builds partnership. It’s not just client-vendor; it’s two sides figuring out how to navigate geopolitics together.
Ultimately, the trade showdown between the U.S. and EU is a fluid situation. It may de-escalate with a negotiated truce (fingers crossed), or it may intensify for a while. As a Procurement professional, I can’t control the outcome, but I can control our readiness. By understanding the landscape and adjusting our Procurement strategies, we ensure that our organisations can continue leveraging technology effectively, trade war or not. And as a European and a tech enthusiast, I’ll be hoping for the day when cooperation, not tariffs, drives the transatlantic digital economy – making my job just a little bit easier.
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References
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- Politico (2025). EU considers hitting services in response to Trump’s tariffs. Politico, 31 March 2025 .
- BusinessEurope (2025). Comments on EU trade escalation. (Quoted in Politico, 31 March 2025) .
- Claburn, T. (2022). France says non to Office 365 and Google Workspace in school. The Register, 22 Nov 2022 .
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- S&P Global Ratings (2019). Global Trade At A Crossroads: Latest Tariff Threat Would Be An Even Bigger Blow To The U.S. Tech Sector, 5 Aug 2019 .
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