The EU's Covert Tool to Counter Trump's Economic Bullying: Moment to Utilize It

Can Brussels finally resist the US administration and US big tech? Present passivity is not just a regulatory or economic shortcoming: it represents a moral collapse. This inaction undermines the very foundation of Europe's democratic identity. 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 online environment according to its own regulations.

The Path to This Point

First, let us recount the events leading here. During the summer, the European Commission accepted a humiliating deal with Trump that established a ongoing 15% tax on EU exports 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 energy and defense equipment. The deal exposed the vulnerability of the EU's reliance on the US.

Soon after, Trump warned of severe new tariffs if Europe enforced its regulations against American companies on its own soil.

Europe's Claim vs. Reality

Over many years EU officials has claimed that its market of 450 million rich people gives it significant leverage in international commerce. But in the six weeks since the US warning, Europe has taken minimal action. Not a single counter-action has been implemented. No invocation of the recently created anti-coercion instrument, the so-called “trade bazooka” that the EU once vowed would be its ultimate protection against foreign pressure.

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

US Intentions

The US, under the current administration, has made its intentions clear: it does not aim to support European democracy. It seeks to undermine it. A recent essay published on the US Department of State's website, composed in alarmist, bombastic language similar to Hungarian leadership, accused the EU of “an aggressive campaign against democratic values itself”. It condemned supposed restrictions on authoritarian parties across the EU, from German political movements to PiS in Poland.

The Solution: Anti-Coercion Instrument

What is to be done? The EU's trade defense mechanism works by calculating the degree of the pressure and imposing retaliatory measures. Provided most European governments consent, the European Commission could kick US goods and services out of the EU market, or apply taxes on them. It can remove their intellectual property rights, prevent their financial activities and require reparations as a requirement of readmittance to EU economic space.

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

Internal Disagreements

In the months preceding the transatlantic agreement, several EU states talked tough in public, but failed to push for the mechanism to be activated. Others, such as Ireland and Italy, openly advocated a softer European line.

Compromise is the worst option that Europe needs. It must enforce its regulations, even when they are inconvenient. Along with the trade tool, the EU should disable social media “for you”-style systems, that recommend content the user has not requested, on EU territory until they are demonstrated to be secure for democratic societies.

Comprehensive Approach

Citizens – not the automated systems of foreign oligarchs serving external agendas – should have the freedom to decide for themselves about what they see and share online.

The US administration is putting Europe under pressure to water down its online regulations. But now especially important, the EU should hold large US tech firms responsible for distorting competition, surveillance practices, and targeting minors. Brussels must hold certain member states responsible for not implementing Europe's digital rules on American companies.

Regulatory action is not enough, however. Europe must gradually substitute all foreign “major technology” platforms and cloud services over the coming years with European solutions.

Risks of Delay

The real danger of this moment is that if Europe does not take immediate action, it will never act again. The more delay occurs, the more profound the decline of its self-belief in itself. The more it will believe that opposition is pointless. The greater the tendency that its laws are unenforceable, its institutions not sovereign, its democracy not self-determined.

When that occurs, the route to authoritarianism becomes unavoidable, through automated influence on social media and the acceptance of misinformation. If Europe continues to cower, it will be drawn into that same abyss. The EU must act now, not just to push back against US pressure, but to create space for itself to function as a free and autonomous power.

Global Implications

And in taking action, it must make a statement that the rest of the world can see. In North America, South Korea and East Asia, democratic nations are watching. They are questioning if the EU, the remaining stronghold of international cooperation, will resist foreign pressure or yield to it.

They are asking whether democratic institutions can survive when the most powerful democracy in the world turns its back on them. They also see the example of Lula in Brazil, who confronted US pressure and demonstrated that the way to address a bully is to respond firmly.

But if the EU hesitates, if it continues to release polite statements, to levy token fines, to hope for a better future, it will have already lost.

Holly Vargas
Holly Vargas

An avid skier and outdoor enthusiast with over a decade of experience exploring slopes worldwide.