The EU's Hidden Weapon to Counter US Trade Bullying: Time to Deploy It

Can Brussels finally resist the US administration and American tech giants? The current passivity is not just a legal or financial shortcoming: it constitutes a moral failure. This situation calls into question the core principles of the EU's political sovereignty. The central issue is not only the future of companies like Google or Meta, but the principle that Europe has the right to govern its own digital space according to its own regulations.

How We Got Here

To begin, let us recount the events leading here. During the summer, the EU executive accepted a one-sided deal with the US that established a permanent 15% tariff on European goods to the US. The EU received nothing in return. The indignity was compounded because the EU also agreed to direct well over $1tn to the US through investments and acquisitions of resources and military materiel. This arrangement exposed the fragility of Europe's dependence on the US.

Soon after, Trump threatened severe additional taxes if Europe implemented its laws against US tech firms on its own territory.

The Gap Between Rhetoric and Action

For decades Brussels has claimed that its market of 450 million affluent people gives it significant leverage in trade negotiations. But in the six weeks since Trump's threat, Europe has taken minimal action. Not a single retaliatory measure has been taken. No activation of the new anti-coercion instrument, the so-called “trade bazooka” that the EU once vowed would be its primary shield against external coercion.

Instead, we have polite statements and a fine on Google of under 1% of its annual revenue for longstanding anticompetitive behaviour, previously established in American legal proceedings, that enabled it to “exploit” its market leadership in the EU's digital ad space.

American Strategy

The US, under Trump's leadership, has made its intentions clear: it does not aim to support EU institutions. It aims to undermine it. A recent essay published on the US State Department platform, composed in alarmist, bombastic rhetoric similar to Hungarian leadership, charged the EU of “systematic efforts against democratic values itself”. It criticized supposed limitations on political groups across the EU, from German political movements to PiS in Poland.

The Solution: Anti-Coercion Instrument

How should Europe respond? The EU's anti-coercion instrument functions through calculating the extent of the coercion and applying retaliatory measures. Provided most European governments consent, the European Commission could remove US goods and services out of Europe's market, or impose taxes on them. It can remove their patents and copyrights, block their investments and demand reparations as a requirement of re-entry to Europe's market.

The instrument is not only economic retaliation; it is a declaration of determination. It was designed to demonstrate that the EU would always resist 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 period preceding the EU-US trade deal, many European governments used strong language in official statements, but failed to push for the instrument to be activated. Some nations, such as Ireland and Italy, openly advocated more conciliatory approach.

Compromise is the worst option that the EU needs. It must enforce its regulations, even when they are challenging. In addition to the trade tool, the EU should shut down social media “for you”-style systems, that suggest material the user has not asked for, on European soil until they are proven safe for democratic societies.

Comprehensive Approach

The public – not the automated systems of international billionaires beholden to external agendas – should have the autonomy to decide for themselves about what they see and distribute online.

The US administration is pressuring the EU to weaken its digital rulebook. But now especially important, Europe should hold American technology companies responsible for distorting competition, surveillance practices, and targeting minors. Brussels must ensure Ireland responsible for failing to enforce Europe's online regulations on American companies.

Enforcement is not enough, however. Europe must progressively replace all foreign “big tech” platforms and cloud services over the coming years with European solutions.

The Danger of Inaction

The significant risk of the current situation is that if the EU does not take immediate action, it will never act again. The longer it waits, the deeper the decline of its confidence in itself. The more it will believe that resistance is futile. The greater the tendency that its laws are not binding, its governmental bodies lacking autonomy, its political system dependent.

When that happens, the route to authoritarianism becomes unavoidable, through algorithmic manipulation on social media and the normalisation of misinformation. If Europe continues to cower, it will be pulled toward that same decline. Europe must act now, not only to push back against US pressure, but to create space for itself to exist 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 East Asia, democratic nations are observing. They are wondering if the EU, the last bastion of liberal multilateralism, will resist external influence or yield to it.

They are asking whether representative governments can survive when the leading democratic nation in the world abandons them. They also see the model of Brazilian leadership, who faced down Trump and demonstrated that the approach to address a bully is to respond firmly.

But if the EU delays, if it continues to release polite statements, to levy token fines, to hope for a improved situation, it will have effectively surrendered.