The EU's Covert Tool to Counter Trump's Trade Bullying: Time to Activate It

Can European leadership finally stand up to Donald Trump and US big tech? Present lack of response goes beyond a regulatory or economic shortcoming: it constitutes a ethical collapse. This situation undermines the bedrock of the EU's democratic identity. The central issue is not only the future of companies like Google or Meta, but the fundamental idea that Europe has the right to govern its own online environment according to its own laws.

Background Context

First, it's important to review how we got here. During the summer, the EU executive accepted a humiliating agreement with Trump that locked in a permanent 15% tariff on European goods to the US. The EU received nothing in return. The embarrassment was compounded because the EU also agreed 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 dependence on the US.

Less than a month later, the US administration warned of severe new tariffs if the EU implemented its regulations against US tech firms on its own soil.

Europe's Claim vs. Reality

Over many years Brussels has claimed that its economic zone of 450 million affluent people gives it significant leverage in international commerce. But in the month and a half since the US warning, Europe has taken minimal action. Not a single counter-action has been implemented. No activation of the new trade defense tool, the often described “trade bazooka” that the EU once promised would be its ultimate shield against foreign pressure.

Instead, we have polite statements and a penalty on Google of under 1% of its annual revenue for established anticompetitive behaviour, already proven in US courts, that enabled it to “exploit” its dominant position in Europe's digital ad space.

American Strategy

The US, under Trump's leadership, has made its intentions clear: it no longer seeks to support European democracy. It seeks to weaken it. An official publication released on the US State Department website, composed in alarmist, inflammatory rhetoric reminiscent of Viktor Orbán's speeches, accused Europe of “an aggressive campaign against democratic values itself”. It criticized alleged restrictions on authoritarian parties across the EU, from the AfD in Germany to PiS in Poland.

The Solution: Anti-Coercion Instrument

What is to be done? The EU's trade defense mechanism functions through assessing the extent of the coercion and imposing retaliatory measures. If EU member states agree, the European Commission could kick US goods and services out of the EU market, or impose taxes on them. It can remove their patents and copyrights, prevent their investments and demand compensation as a condition of readmittance to Europe's market.

The tool is not only economic retaliation; it is a statement of determination. It was designed to signal that the EU would never tolerate foreign coercion. But now, when it is most crucial, it remains inactive. It is not the powerful weapon promised. It is a symbolic object.

Internal Disagreements

In the months preceding the transatlantic agreement, several EU states talked tough in official statements, but failed to push for the instrument to be used. Some nations, including Ireland and Italy, publicly pushed for a softer European line.

Compromise is the worst option that the EU needs. It must enforce its regulations, even when they are inconvenient. In addition to the trade tool, Europe should disable social media “for you”-style algorithms, that suggest content the user has not requested, on EU territory until they are proven safe for democratic societies.

Broader Digital Strategy

The public – not the algorithms of foreign oligarchs beholden to foreign interests – should have the freedom to decide for themselves about what they view and share online.

The US administration is pressuring the EU to weaken its online regulations. But now especially important, Europe should hold large US tech firms accountable for anti-competitive market rigging, surveillance practices, and preying on our children. EU authorities must ensure Ireland responsible for not implementing EU online regulations on US firms.

Enforcement is insufficient, however. The EU must progressively replace all foreign “major technology” services and computing infrastructure over the coming years with European solutions.

The Danger of Inaction

The significant risk of this moment is that if the EU does not act now, it will never act again. The longer it waits, the deeper the erosion of its confidence in itself. The more it will believe that resistance is futile. The more it will accept that its regulations are not binding, its institutions lacking autonomy, its democracy not self-determined.

When that happens, the path to authoritarianism becomes unavoidable, through automated influence on social media and the normalisation of misinformation. If Europe 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 establish conditions for itself to exist as a independent and sovereign entity.

Global Implications

And in taking action, it must plant a flag that the international community can see. In North America, South Korea and Japan, democratic nations are watching. They are wondering if the EU, the remaining stronghold of international cooperation, will resist external influence or surrender to it.

They are asking whether democratic institutions can survive when the leading democratic nation in the world turns its back on them. They also see the model of Lula in Brazil, who faced down Trump and demonstrated that the way to deal with a bully is to respond firmly.

But if Europe delays, if it continues to issue diplomatic communications, to levy symbolic penalties, to hope for a improved situation, it will have effectively surrendered.