The EU's Covert Tool to Counter Trump's Economic Bullying: Time to Deploy It
Can Brussels finally stand up to Donald Trump and US big tech? Present lack of response is not just a regulatory or financial failure: it represents a moral collapse. This situation calls into question the very foundation of the EU's political sovereignty. The central issue is not only the fate of companies like Google or Meta, but the fundamental idea that the European Union has the authority to govern its own digital space according to its own regulations.
The Path to This Point
First, consider how we got here. During the summer, the EU executive agreed to a one-sided agreement with Trump that established a permanent 15% tax on European goods to the US. Europe gained no concessions in return. The embarrassment was compounded because the commission also consented to provide more than $1tn to the US through investments and purchases of resources and defense equipment. The deal exposed the vulnerability of the EU's dependence on the US.
Less than a month later, the US administration threatened crushing new tariffs if the EU implemented its laws against American companies 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 unanswerable leverage in international commerce. But in the month and a half since the US warning, Europe has done little. Not a single counter-action has been taken. No invocation of the new trade defense tool, the often described “trade bazooka” that Brussels once vowed would be its primary protection against foreign pressure.
Instead, we have diplomatic language and a fine on Google of less than 1% of its yearly income for longstanding anticompetitive behaviour, previously established in American legal proceedings, that enabled it to “exploit” its dominant position in Europe's advertising market.
American Strategy
The US, under Trump's leadership, has made its intentions clear: it does not aim to strengthen EU institutions. It seeks to weaken it. An official publication released on the US State Department website, composed in paranoid, inflammatory rhetoric reminiscent of Viktor Orbán's speeches, accused Europe of “systematic efforts against democratic values itself”. It criticized supposed limitations on authoritarian parties across the EU, from the AfD in Germany to PiS in Poland.
Available Tools for Response
How should Europe respond? The EU's anti-coercion instrument functions through calculating the degree of the coercion and imposing counter-actions. Provided most European governments consent, the EU executive could remove US goods and services out of the EU market, or apply tariffs on them. It can remove their intellectual property rights, prevent their financial activities and demand reparations as a condition of readmittance to EU economic space.
The instrument is not only economic retaliation; it is a declaration of political will. It was created to demonstrate that the EU would never tolerate external pressure. But now, when it is needed most, it remains inactive. It is not the powerful weapon promised. It is a paperweight.
Internal Disagreements
In the period leading to the transatlantic agreement, several EU states used strong language in public, but failed to push for the mechanism to be used. Some nations, including Ireland and Italy, publicly pushed for more conciliatory approach.
A softer line is the last thing that Europe needs. It must enforce its regulations, even when they are inconvenient. In addition to the anti-coercion instrument, Europe should disable social media “for you”-style systems, that recommend content the user has not asked for, on European soil until they are demonstrated to be secure for democracy.
Comprehensive Approach
The public – not the algorithms of international billionaires beholden to foreign interests – should have the freedom to decide for themselves about what they view and share online.
The US administration is putting Europe under pressure to water down its digital rulebook. But now more than ever, the EU should make American technology companies responsible for anti-competitive market rigging, surveillance practices, and preying on our children. Brussels must ensure certain member states responsible for not implementing Europe's online regulations on American companies.
Regulatory action is insufficient, however. Europe must gradually substitute all non-EU “major technology” services and cloud services over the next decade with European solutions.
The Danger of Inaction
The real danger of this moment is that if the EU does not act now, it will never act again. The longer it waits, the more profound the erosion of its confidence in itself. The increasing acceptance that opposition is pointless. The greater the tendency that its laws are unenforceable, its institutions lacking autonomy, its political system not self-determined.
When that happens, the path to authoritarianism becomes unavoidable, through algorithmic manipulation on social media and the acceptance of lies. If Europe continues to cower, it will be drawn into that same abyss. The EU must take immediate steps, not just to push back against Trump, but to establish conditions for itself to function as a independent and sovereign entity.
International Perspective
And in taking action, it must plant a flag that the rest of the world can see. In North America, Asia and Japan, democratic nations are observing. They are questioning if the EU, the remaining stronghold of international cooperation, will resist external influence or yield to it.
They are asking whether democratic institutions can survive when the leading democratic nation in the world abandons them. They also see the model of Brazilian leadership, who confronted Trump and demonstrated that the approach to address a bully is to hit hard.
But if the EU hesitates, if it continues to issue diplomatic communications, to levy token fines, to anticipate a improved situation, it will have effectively surrendered.