The EU's Covert Weapon to Address Trump's Economic Bullying: Time to Activate It

Can the EU ever stand up to Donald Trump and US big tech? The current passivity goes beyond a legal or economic failure: it constitutes a ethical collapse. This inaction undermines the core principles of the EU's democratic identity. What is at stake is not only the future of companies like Google or Meta, but the fundamental idea that the European Union has the right to regulate its own online environment according to its own regulations.

The Path to This Point

First, consider how we got here. In late July, the European Commission accepted a humiliating deal with the US that established a permanent 15% tariff 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 well over $1tn to the US through investments and purchases of energy and defense equipment. The deal exposed the vulnerability of Europe's dependence on the US.

Soon after, the US administration warned of severe additional taxes if Europe enforced its laws against American companies on its own territory.

The Gap Between Rhetoric and Action

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 Trump's threat, Europe has taken minimal action. Not a single retaliatory measure has been implemented. No invocation of the new anti-coercion instrument, the often described “trade bazooka” that the EU once promised 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 allowed it to “abuse” its dominant position in Europe's advertising market.

American Strategy

The US, under Trump's leadership, has signaled its goals: it no longer seeks to strengthen EU institutions. It aims to undermine it. A recent essay published on the US Department of State's website, written in alarmist, inflammatory language reminiscent of Viktor Orbán's speeches, charged the EU of “an aggressive campaign against democratic values itself”. It condemned alleged limitations on political groups across the EU, from the AfD in Germany to Polish organizations.

Available Tools for Response

How should Europe respond? The EU's trade defense mechanism functions through calculating the extent of the pressure and applying counter-actions. If most European governments agree, the European Commission could remove US products out of Europe's market, or impose tariffs on them. It can strip their patents and copyrights, prevent their investments and demand reparations as a requirement of re-entry to Europe's market.

The tool is not only financial response; it is a declaration of political will. It was created to signal that the EU would never tolerate external pressure. But now, when it is needed most, it remains inactive. It is not the powerful weapon promised. It is a symbolic object.

Political Divisions

In the months leading to the transatlantic agreement, several EU states talked tough in official statements, 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 the EU needs. It must enforce its laws, even when they are inconvenient. Along with the trade tool, the EU should shut down social media “for you”-style systems, that suggest content the user has not requested, on European soil until they are proven safe for democracy.

Comprehensive Approach

Citizens – not the algorithms of international billionaires serving foreign interests – should have the autonomy to make independent choices about what they see and share online.

The US administration is putting Europe under pressure to water down its digital rulebook. But now especially important, Europe should make large US tech firms accountable for anti-competitive market rigging, surveillance practices, and preying on our children. EU authorities must hold Ireland accountable for not implementing EU online regulations on American companies.

Regulatory action is insufficient, however. The EU must progressively replace all foreign “major technology” services and computing infrastructure over the next decade with European solutions.

The Danger of Inaction

The real danger of this moment is that if Europe does not act now, it will never act again. The more delay occurs, the deeper the erosion of its confidence in itself. The more it will believe that opposition is pointless. The greater the tendency that its regulations are unenforceable, its governmental bodies not sovereign, its political system not self-determined.

When that happens, the route to authoritarianism becomes inevitable, through algorithmic manipulation on social media and the acceptance of misinformation. If Europe continues to cower, it will be pulled toward that same abyss. The EU must act now, not just to resist US pressure, but to establish conditions for itself to function as a free and sovereign entity.

Global Implications

And in doing so, it must plant a flag that the rest of the world can see. In Canada, South Korea and East Asia, democratic nations are observing. They are wondering if the EU, the remaining stronghold of liberal multilateralism, will resist external influence or surrender to it.

They are asking whether representative governments can endure when the most powerful democracy in the world turns its back on them. They also see the example of Lula in Brazil, who faced down Trump and demonstrated that the approach to deal with a aggressor is to respond firmly.

But if the EU hesitates, if it continues to issue polite statements, to levy token fines, to anticipate a improved situation, it will have already lost.

Shane Smith
Shane Smith

A passionate environmental technologist and writer, dedicated to exploring how innovation can drive sustainability and positive change.