The EU's Hidden Instrument to Combat Trump's Trade Pressure: Time to Deploy It
Can Brussels ever stand up to the US administration and US big tech? The current lack of response is not just a regulatory or economic failure: it constitutes a ethical failure. This inaction throws into question the bedrock of Europe's democratic identity. What is at stake is not merely the future of companies like Google or Meta, but the fundamental idea that the European Union has the authority to govern its own online environment according to its own rules.
The Path to This Point
To begin, it's important to review the events leading here. In late July, the EU executive accepted a one-sided deal with the US that established a permanent 15% tax on European goods to the US. The EU gained no concessions in return. The embarrassment was all the greater because the EU also agreed to direct more than $1tn to the US through investments and purchases of energy and military materiel. This arrangement revealed the vulnerability of Europe'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 EU officials has asserted that its economic zone of 450 million rich people gives it significant leverage in international commerce. But in the month and a half since the US warning, Europe has done little. Not a single retaliatory measure has been taken. No activation of the recently created anti-coercion instrument, the so-called “trade bazooka” that the EU once vowed would be its ultimate shield against foreign pressure.
Instead, we have diplomatic language and a penalty on Google of under 1% of its yearly income for established market abuses, previously established in US courts, that enabled it to “abuse” its market leadership in the EU's advertising market.
US Intentions
The US, under Trump's leadership, has made its intentions clear: it no longer seeks to strengthen European democracy. It aims to undermine it. An official publication published on the US Department of State's website, composed in paranoid, inflammatory language reminiscent of Hungarian leadership, charged Europe of “an aggressive campaign against democratic values itself”. It criticized supposed restrictions on authoritarian parties across the EU, from the AfD in Germany to Polish organizations.
The Solution: Anti-Coercion Instrument
What is to be done? 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 products out of the EU market, or apply tariffs on them. It can strip their patents and copyrights, prevent their investments and demand compensation 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 created to signal that the EU would always resist foreign coercion. But now, when it is needed most, it lies unused. It is not a bazooka. It is a paperweight.
Political Divisions
In the months leading to the EU-US trade deal, several EU states talked tough in official statements, but failed to push for the instrument to be activated. Some nations, including Ireland and Italy, openly advocated a softer European line.
A softer line is the worst option that the EU needs. It must implement its regulations, even when they are inconvenient. In addition to the trade tool, the EU should disable social media “recommended”-style systems, that suggest material the user has not requested, on EU territory until they are proven safe for democracy.
Comprehensive Approach
The public – not the automated systems of international billionaires beholden to foreign interests – should have the freedom to decide for themselves about what they view and distribute online.
Trump is pressuring the EU to water down its online regulations. But now especially important, the EU should make large US tech firms accountable for anti-competitive market rigging, surveillance practices, and targeting minors. Brussels must ensure certain member states responsible for failing to enforce Europe's online regulations on US firms.
Regulatory action is insufficient, however. Europe must gradually substitute all non-EU “big tech” services and computing infrastructure over the coming years with homegrown alternatives.
Risks of Delay
The significant risk of the current situation is that if the EU does not act now, it will never act again. The more delay occurs, the more profound the erosion of its confidence in itself. The increasing acceptance that resistance is futile. The greater the tendency that its regulations are unenforceable, its institutions not sovereign, its democracy not self-determined.
When that happens, the path to authoritarianism becomes inevitable, through automated influence on social media and the normalisation of misinformation. If the EU continues to remain passive, 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 exist as a free and autonomous power.
International Perspective
And in doing so, it must make a statement that the international community can see. In Canada, South Korea and Japan, democracies are observing. They are wondering if the EU, the remaining stronghold of liberal multilateralism, will resist external influence or yield to it.
They are asking whether representative governments can survive 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 way to deal with a bully is to respond firmly.
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.