The EU's Secret Tool to Address US Trade Bullying: Moment to Deploy It
Can Brussels finally resist Donald Trump and American tech giants? The current inaction goes beyond a regulatory or financial shortcoming: it constitutes a ethical failure. This situation throws into question the core principles of Europe's democratic identity. What is at stake is not only the fate of companies like Google or Meta, but the fundamental idea that the European Union has the authority to regulate its own digital space according to its own rules.
Background Context
To begin, consider how we got here. In late July, the EU executive agreed to a one-sided deal with Trump that locked in a permanent 15% tax on EU exports to the US. The EU gained no concessions in return. The indignity was all the greater because the commission also consented to provide more than $1tn to the US through investments and purchases of resources and military materiel. The deal revealed the vulnerability of Europe's reliance on the US.
Soon after, the US administration warned of severe additional taxes if Europe implemented its laws against US tech firms on its own soil.
The Gap Between Rhetoric and Action
Over many years EU officials has asserted that its economic zone of 450 million rich people gives it significant sway in trade negotiations. But in the six weeks since the US warning, Europe has taken minimal action. No retaliatory measure has been implemented. No invocation of the new trade defense tool, the so-called “trade bazooka” that the EU once promised would be its ultimate protection against foreign pressure.
By contrast, we have diplomatic language and a fine on Google of under 1% of its annual revenue for established anticompetitive behaviour, previously established in American legal proceedings, that allowed it to “abuse” its dominant position in Europe's advertising market.
American Strategy
The US, under the current administration, has made its intentions clear: it does not aim to support European democracy. It aims to undermine it. An official publication published on the US State Department website, written in alarmist, inflammatory language reminiscent of Hungarian leadership, accused Europe of “an aggressive campaign against Western civilization itself”. It condemned alleged restrictions on authoritarian parties across the EU, from German political movements to PiS in Poland.
Available Tools for Response
What is to be done? Europe's anti-coercion instrument works by assessing the degree of the coercion and applying counter-actions. If EU member states agree, the EU executive could kick US products out of the EU market, or apply taxes on them. It can strip their patents and copyrights, block their financial activities and demand compensation as a requirement of re-entry to EU economic space.
The instrument is not merely financial response; it is a declaration of determination. It was created to demonstrate that the EU would always resist external pressure. But now, when it is most crucial, it lies unused. It is not the powerful weapon promised. It is a paperweight.
Political Divisions
In the months leading to the transatlantic agreement, several EU states talked tough in public, but failed to push for the instrument to be used. Some nations, including Ireland and Italy, openly advocated a softer European line.
A softer line is the last thing that the EU needs. It must enforce its laws, even when they are inconvenient. Along with the anti-coercion instrument, the EU should disable social media “recommended”-style algorithms, that suggest content the user has not asked for, on European soil until they are proven safe for democracy.
Comprehensive Approach
Citizens – not the algorithms of foreign oligarchs beholden to foreign interests – should have the freedom to make independent choices about what they see and distribute online.
The US administration is putting Europe under pressure to weaken its online regulations. But now especially important, Europe should hold American technology companies responsible for distorting competition, snooping on Europeans, and preying on our children. EU authorities must hold certain member states accountable for not implementing Europe's digital rules on US firms.
Enforcement is insufficient, however. Europe must gradually substitute all non-EU “major technology” platforms and cloud services over the next decade with homegrown alternatives.
The Danger of Inaction
The real danger of this moment is that if Europe does not act now, it will never act again. The longer it waits, the deeper the decline of its confidence in itself. The increasing acceptance that opposition is pointless. The greater the tendency that its laws are not binding, its governmental bodies not sovereign, its democracy dependent.
When that happens, the path to undemocratic rule becomes inevitable, through algorithmic manipulation on social media and the acceptance of lies. If the EU continues to remain passive, it will be pulled toward that same decline. Europe must take immediate steps, not just to resist Trump, but to create space for itself to exist as a free and autonomous power.
International Perspective
And in taking action, it must make a statement that the rest of the world can see. In Canada, Asia and Japan, democracies are watching. They are wondering if the EU, the remaining stronghold of international cooperation, will stand against foreign pressure or surrender to it.
They are asking whether democratic institutions can endure when the most powerful democracy in the world turns its back on them. They also see the model of Lula in Brazil, who confronted US pressure and showed that the approach to deal with a aggressor is to respond firmly.
But if the EU hesitates, if it continues to issue diplomatic communications, to impose token fines, to hope for a better future, it will have already lost.