Say goodbye to your Netflix and PlayStation thanks to the tariffs trade war

The tariffs battle will also impact you: Your Netflix and PlayStation memberships could become unaffordable!

Trade wars aren’t just about steel, cars, or agricultural goods anymore. The recent escalation between the United States and the European Union is set to shake up the digital world as well, directly affecting your favorite online services.

If you rely on U.S.-based SaaS (Software as a Service) products, from entertainment platforms like Netflix and PlayStation Plus to essential business tools like Microsoft 365 or Salesforce, brace yourself—price hikes and service disruptions may be on the horizon.

I will dive deeper into this in this article.

What’s happening?

The U.S. has announced new tariffs targeting European imports in response to long-standing trade disputes. The EU, in turn, is preparing to retaliate, potentially hitting American technology companies, including those offering digital services.

While physical goods have traditionally been the focus of trade wars, digital products and services are now in the crossfire.

How will this impact SaaS subscriptions?

Many U.S.-based SaaS companies operate within the EU through local entities, which could theoretically shield them from direct tariff impacts.

However, there are several reasons why your subscriptions might still become more expensive:

• Digital services taxes (DST): Many European countries already impose special taxes on U.S. tech giants, and the EU may introduce new ones in retaliation.
• Compliance and regulation costs: The EU’s Digital Markets Act (DMA) and Digital Services Act (DSA) require extensive compliance efforts, adding to the cost of doing business in Europe.
• Tariffs on software licenses & cloud services: If the EU imposes tariffs on U.S. software or cloud-based services, SaaS companies may pass these costs on to consumers.
• Currency fluctuations & inflation: Trade disputes can weaken currencies and increase operational costs, which SaaS providers may offset by raising prices.

Will U.S. SaaS companies try to avoid these costs?

Some U.S. SaaS providers might attempt to restructure their EU operations to avoid direct impacts. However, if tariffs or additional taxes hit their revenue streams, they have limited options:

• Passing costs to consumers: Expect price increases on subscriptions like Netflix, Spotify, Adobe Creative Cloud, and even gaming services like Xbox Game Pass and PlayStation Plus.
• Service reductions: Some companies might limit features, remove specific service tiers, or geo-block content.
• Exiting the market: While unlikely for major players, smaller SaaS providers may decide the EU market is no longer viable.

What can you do?

For consumers, this trade battle could mean higher prices or degraded service quality. Here are a few steps to mitigate the impact:

• Lock in long-term subscriptions now: If possible, subscribe to annual plans before potential price hikes take effect.
• Explore local alternatives: Some European SaaS providers might offer competitive services without tariff-induced price spikes.
• Monitor policy changes: Keep an eye on negotiations between the U.S. and the EU to anticipate price shifts.

But it also leaves room for opportunities!

While U.S. tech giants may face challenges operating in the European market, this creates an opening for European entrepreneurs and companies to step in.

As U.S. services become more expensive or restricted, there will open-up an opportunity for new, locally-based alternatives to emerge.

This might sound surreal, but it's already happening in certain sectors. Take Mistral AI, the French company that is positioning itself as a European alternative to U.S.-based AI giants like OpenAI.

The same could happen in the entertainment and SaaS space—imagine a European version of Netflix or a homegrown gaming subscription service.

With the right innovation and funding, new digital services tailored to the European market could thrive, reducing reliance on U.S. tech companies.

Final thoughts

The ongoing trade tensions between the U.S. and the EU are no longer confined to traditional goods but have expanded to digital services, affecting everyday consumers.

Whether it’s Netflix, PlayStation, or critical business tools, the cost of digital services is likely to rise. Understanding these changes can help users prepare for what’s coming next in this evolving trade dispute.

Stay informed, plan ahead, and don’t be surprised when your favorite subscription service announces a price increase in the coming months.