Europe's Covert Instrument to Address US Trade Bullying: Moment to Utilize It
Can Brussels ever stand up to Donald Trump and US big tech? Present lack of response is not just a regulatory or economic shortcoming: it represents a ethical collapse. This inaction calls into question the very foundation of the EU's democratic identity. The central issue is not merely the future of firms such as Google or Meta, but the principle that Europe has the right to regulate its own online environment according to its own regulations.
The Path to This Point
First, it's important to review how we got here. In late July, the European Commission agreed to a one-sided agreement with Trump that locked in a ongoing 15% tariff on EU exports to the US. Europe received nothing in return. The indignity was all the greater because the commission also consented to provide well over $1tn to the US through investments and acquisitions of energy and military materiel. This arrangement exposed the vulnerability of the EU's reliance on the US.
Less than a month later, Trump warned of crushing additional taxes if the EU enforced its regulations against American companies on its own soil.
Europe's Claim vs. Reality
Over many years EU officials has claimed that its economic zone of 450 million rich people gives it unanswerable leverage in trade negotiations. But in the six weeks since the US warning, Europe has done little. Not a single retaliatory measure has been taken. No invocation of the new anti-coercion instrument, the often described “trade bazooka” that the EU once promised would be its primary shield against external coercion.
By contrast, we have polite statements and a fine on Google of less than 1% of its yearly income for longstanding anticompetitive behaviour, already proven in American legal proceedings, that allowed it to “exploit” its dominant position in the EU's advertising market.
US Intentions
The US, under Trump's leadership, has signaled its goals: it no longer seeks to support European democracy. It aims to undermine it. A recent essay published on the US Department of State's platform, written in paranoid, inflammatory language reminiscent of Hungarian leadership, charged Europe of “systematic efforts against Western civilization itself”. It condemned alleged limitations on political groups across the EU, from the AfD in Germany to Polish organizations.
Available Tools for Response
What is to be done? The EU's trade defense mechanism functions through assessing the extent of the coercion and imposing retaliatory measures. If most European governments consent, the European Commission could remove US products out of the EU market, or impose tariffs on them. It can strip their intellectual property rights, prevent their investments and require reparations as a requirement of readmittance to Europe's market.
The tool is not merely financial response; it is a statement of determination. It was designed to demonstrate that Europe would never tolerate foreign coercion. But now, when it is most crucial, it lies unused. It is not a bazooka. It is a paperweight.
Political Divisions
In the period leading to the transatlantic agreement, many European governments talked tough in official statements, but failed to push for the instrument to be used. Some nations, including Ireland and Italy, publicly pushed for more conciliatory approach.
Compromise is the last thing that Europe needs. It must enforce its laws, even when they are challenging. Along with the anti-coercion instrument, Europe should shut down social media “for you”-style systems, that suggest material the user has not requested, on European soil until they are demonstrated to be secure for democratic societies.
Comprehensive Approach
Citizens – not the automated systems of international billionaires beholden to external agendas – should have the freedom to decide for themselves about what they see and share online.
The US administration is pressuring the EU to weaken its digital rulebook. But now more than ever, Europe should hold American technology companies responsible for distorting competition, surveillance practices, and targeting minors. EU authorities must ensure certain member states accountable for not implementing Europe's digital rules on American companies.
Regulatory action is not enough, however. The EU must gradually substitute all non-EU “major technology” platforms and computing infrastructure over the next decade with European solutions.
Risks of Delay
The real danger of the current situation is that if Europe does not act now, it will never act again. The longer it waits, the deeper the erosion of its confidence in itself. The increasing acceptance that opposition is pointless. The greater the tendency that its regulations are not binding, its governmental bodies lacking autonomy, its democracy dependent.
When that occurs, the route to undemocratic rule becomes unavoidable, through automated influence on social media and the acceptance of misinformation. If the EU continues to remain passive, it will be pulled toward that same decline. The EU must take immediate steps, not only to resist US pressure, but to create space for itself to function as a independent and sovereign entity.
International Perspective
And in doing so, it must make a statement that the rest of the world can see. In Canada, Asia and Japan, democracies are watching. They are questioning if the EU, the last bastion of international cooperation, will resist foreign pressure or yield to it.
They are asking whether democratic institutions can endure when the most powerful democracy in the world abandons them. They also see the model of Brazilian leadership, who faced down US pressure and showed that the approach to deal with a bully is to hit hard.
But if the EU hesitates, if it continues to issue diplomatic communications, to levy token fines, to hope for a better future, it will have already lost.