The EU's Hidden Instrument to Combat Trump's Trade Bullying: Time to Activate It
Can the EU ever resist Donald Trump and American tech giants? The current lack of response is not just a legal or economic shortcoming: it constitutes a ethical failure. This situation calls into question the core principles of Europe's democratic identity. The central issue is not merely the fate of companies like Google or Meta, but the principle that the European Union has the authority to regulate its own online environment according to its own regulations.
How We Got Here
To begin, let us recount how we got here. In late July, the EU executive agreed to a one-sided deal with Trump that locked in a ongoing 15% tax on EU exports to the US. Europe received nothing in return. The indignity was compounded because the EU also consented to direct well over $1tn to the US through financial commitments and purchases of energy and defense equipment. This arrangement exposed the fragility of the EU's dependence on the US.
Soon after, the US administration threatened crushing new tariffs if the EU enforced its regulations against American companies on its own territory.
Europe's Claim vs. Reality
For decades EU officials has claimed that its market of 450 million affluent people gives it significant sway in international commerce. 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 anti-coercion instrument, the often described “trade bazooka” that Brussels once promised would be its primary protection against foreign pressure.
Instead, we have diplomatic language and a penalty on Google of under 1% of its annual revenue for longstanding market abuses, already proven in US courts, that allowed it to “exploit” its dominant position in Europe's advertising market.
American Strategy
The US, under the current administration, has signaled its goals: it no longer seeks to support EU institutions. It seeks to undermine it. A recent essay released on the US State Department website, written in alarmist, bombastic rhetoric similar to Viktor Orbán's speeches, charged the EU of “systematic efforts against Western civilization itself”. It criticized supposed limitations on political groups across the EU, from German political movements to PiS in Poland.
Available Tools for Response
How should Europe respond? The EU's anti-coercion instrument works by calculating the extent of the coercion and imposing retaliatory measures. Provided most European governments consent, the European Commission could kick US products out of the EU market, or impose tariffs on them. It can strip their intellectual property rights, block their financial activities and require compensation as a condition of re-entry to EU economic space.
The instrument is not merely economic retaliation; it is a declaration of political will. It was designed to demonstrate that Europe would never tolerate external pressure. But now, when it is most crucial, it remains inactive. It is not a bazooka. It is a symbolic object.
Political Divisions
In the months preceding the transatlantic agreement, many European governments used strong language in public, but failed to push for the instrument to be used. Some nations, such as Ireland and Italy, openly advocated a softer European line.
Compromise is the worst option that the EU needs. It must enforce its regulations, even when they are challenging. Along with the trade tool, the EU should disable social media “for you”-style systems, that suggest content the user has not asked for, on EU territory until they are demonstrated to be secure for democracy.
Comprehensive Approach
The public – not the automated systems of international billionaires serving external agendas – should have the autonomy to make independent choices about what they view and distribute online.
The US administration is pressuring the EU to water down its online regulations. But now especially important, the EU should make large US tech firms responsible for distorting competition, snooping on Europeans, and targeting minors. Brussels must ensure certain member states responsible for failing to enforce Europe's digital rules on US firms.
Regulatory action is insufficient, however. Europe must gradually substitute all non-EU “major technology” services and cloud services over the coming years with European solutions.
The Danger of Inaction
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 decline of its confidence in itself. The more it will believe that opposition is pointless. The more it will accept that its regulations are not binding, its governmental bodies lacking autonomy, its democracy not self-determined.
When that happens, the route to undemocratic rule becomes inevitable, through automated influence on social media and the acceptance of misinformation. If the EU continues to cower, it will be pulled toward that same decline. Europe must take immediate steps, not only to push back against Trump, but to create space for itself to function as a free and sovereign entity.
Global Implications
And in doing so, it must make a statement that the international community can see. In North America, South Korea and East Asia, democracies are observing. They are wondering if the EU, the last bastion of liberal multilateralism, will resist foreign pressure or yield to it.
They are inquiring whether democratic institutions can survive when the most powerful democracy in the world turns its back on them. They also see the model of Lula in Brazil, who faced down US pressure and demonstrated that the approach to address a aggressor is to respond firmly.
But if the EU hesitates, if it continues to release polite statements, to impose symbolic penalties, to anticipate a better future, it will have already lost.