HACKER Q&A
📣 lysace

Is there a risk of e.g. AWS/GCP services getting "tariffed" in Europe?


The White house has recently communicated its desire to impose onto Europe a "25% tariff on cars and all other things":

https://www.bbc.com/news/articles/c05ml3q2gn7o

Now, Europe doesn't really buy that many things from the US. What we do buy is services. For the HN crowd this generally means e.g. AWS/GCP services.

I work for a EU company with a (un)healthy AWS spend. Workloads are all in EU zones.

What is the likely outcome here, in case the EU decides to put some kind of "tariffs" on digital services from the US in their inevitable response?

Would AWS likely be able to avoid those tariffs for non-US workloads?

  👤 yorwba Accepted Answer ✓
You're probably not paying Amazon (US) directly, but instead their European subsidiary. Amazon (EU) is the importer buying services from Amazon (US) for a fee. If that fee gets taxed, Amazon (US) could simply decide to charge nothing (or only a symbolic amount) until the trade spat blows over.

In the case where a European customer uses resources (and causes costs) in the US, there's a risk of losing money if the "tariff" never goes away, so they would likely have to raise prices for that use case to account for the risk.

If a European customer only causes costs in Europe, that risk is nil, so there wouldn't be a need to raise prices, but Amazon could decide that it's a good excuse to do so anyway.

👤 elchananHaas
Context: I am a software engineer working at AWS in Commerce Platform - International Expansion. All opinions here are my own. Also, I am just an fairly new engineer, not a lawyer.

Countries in Europe are covered by the EMEA SARL (Except for Turkey) https://aws.amazon.com/legal/aws-emea-countries/. When we generate invoices we look at your contact and billing addresses, and since they are EU we will have them come from the EMEA SARL. We may also have it come from a branch of the EMEA SARL if it exists in your country (for example Greece). If your business has a contract with AWS then the contract can override this behavior. AWS applies taxes under some circumstances, see https://aws.amazon.com/legal/aws-emea/.

With regards to tariffs, my understanding is that its a big maybe. EMEA SARL is a fully owned subsidiary of Amazon Web Service Inc. so for tariff purposes it may be treated as AWS Inc. Alternatively, the tariffs could be structured to only apply to US usage. Its the EU's choice. If the EU wants them apply to all AWS/GCP usage then they will.

👤 HenryBemis
Most contracts in EU are with MS Ireland or Google Ireland or xyz Ireland. So 'tariffs' will not affect the pricing per se. What will get weird is when Google will decide to expand their DC or replace X number of hardware, in which case they will ask mamaGoogle to sell to Google Ireland the hardware. Would there be tariffs? (when a company transfers assets to a subsidiary?)(I think not)(someone please correct me)
👤 matt_s
If you are using primarily EU based AWS data centers then I would expect no impact. I would imagine that Amazon (and Google and Microsoft) have EU based corporate entities that own and operate the EU services so in reality your company probably doesn't interact with the US Amazon corporation but a subsidiary.
👤 leftcenterright
In any case, choosing local EU services seems better. At least have a contingency plan or go multi-provider if you are a big enough company.

- https://european-alternatives.eu/

- https://github.com/uscneps/Awesome-European-Tech

👤 fragmede
Cheeto Mussolini can proclaim whatever he wants. AWS/GCP/Azure/OCI all have business entities registered in the EU, that the regions are registered under, and they all have the lawyers to back that up, so no.
👤 -1
Would you buy cloud computing services from China? At this stage, should anyone feel safer with AWS etc.?
👤 brudgers
The current tariff discussions are about imports into the US.

And for at least the value of the paper it is written upon, the US Constitution prohibits taxes on exports.

So I think it is unlikely that an AWS price increase for Europeans would go to th United States Treasury. Bezos pockets sure, Treasury no.

Good luck.

👤 p_ing
Tariffs apply to imported _goods_. Services like software are not imported goods.

    import aws;