The EU's Hidden Tool to Counter US Trade Pressure: Moment to Deploy It

Will Brussels ever confront Donald Trump and American tech giants? The current passivity is not just a regulatory or economic shortcoming: it represents a ethical failure. This inaction throws into question the very foundation of Europe's democratic identity. The central issue is not only the future of firms such as Google or Meta, but the fundamental idea that Europe has the right to regulate its own digital space according to its own rules.

How We Got Here

First, it's important to review how we got here. In late July, the European Commission agreed to a humiliating 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 commission also agreed to direct more than $1tn to the US through investments and purchases of energy and military materiel. The deal exposed the vulnerability of the EU's dependence on the US.

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

The Gap Between Rhetoric and Action

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

By contrast, 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 market leadership in the EU's advertising market.

American Strategy

The US, under the current administration, has made its intentions clear: it no longer seeks to strengthen EU institutions. It seeks to undermine it. An official publication released on the US State Department platform, composed in paranoid, bombastic rhetoric similar to Hungarian leadership, accused the EU of “systematic efforts against Western civilization itself”. It criticized supposed restrictions on authoritarian parties across the EU, from German political movements to Polish organizations.

The Solution: Anti-Coercion Instrument

How should Europe respond? Europe's anti-coercion instrument works by calculating the degree of the coercion and applying counter-actions. If most European governments agree, the EU executive could remove US products out of the EU market, or apply taxes on them. It can strip their intellectual property rights, prevent their financial activities and demand compensation as a requirement of readmittance to Europe's market.

The instrument is not merely economic retaliation; it is a declaration of political will. It was designed to demonstrate that Europe would never tolerate foreign coercion. But now, when it is needed most, it remains inactive. It is not a bazooka. It is a symbolic object.

Political Divisions

In the period preceding the EU-US trade deal, several EU states talked tough in public, but failed to push for the mechanism to be activated. Others, such as Ireland and Italy, publicly pushed for a softer European line.

Compromise is the last thing that the EU needs. It must enforce its laws, even when they are challenging. In addition to the trade tool, the EU should disable social media “recommended”-style algorithms, that recommend content the user has not requested, on EU territory until they are demonstrated to be secure for democracy.

Broader Digital Strategy

Citizens – not the automated systems of foreign oligarchs beholden to foreign interests – should have the freedom to make independent choices about what they view and share online.

The US administration is putting Europe under pressure to weaken its online regulations. But now especially important, Europe should make American technology companies accountable for anti-competitive market rigging, snooping on Europeans, and preying on our children. EU authorities must hold Ireland accountable for not implementing Europe's online regulations on US firms.

Regulatory action is not enough, however. The EU must progressively replace all foreign “big tech” services and cloud services over the coming years with homegrown alternatives.

The Danger of Inaction

The real danger of this moment is that if Europe does not take immediate action, it will become permanently passive. The longer it waits, the deeper the erosion of its confidence in itself. The increasing acceptance that opposition is pointless. The greater the tendency that its laws are not binding, its institutions lacking autonomy, its democracy not self-determined.

When that happens, the route to undemocratic rule becomes unavoidable, through algorithmic manipulation on social media and the normalisation of lies. If Europe continues to cower, it will be drawn into that same abyss. The EU must act now, not just to push back against Trump, but to establish conditions for itself to function as a free and sovereign entity.

International Perspective

And in doing so, it must make a statement that the rest of the world can see. In North America, Asia and East Asia, democratic nations are watching. They are questioning if the EU, the remaining stronghold of liberal multilateralism, will resist external influence or surrender to it.

They are asking whether democratic institutions can endure when the most powerful democracy in the world abandons them. They also see the example of Brazilian leadership, who faced down US pressure and demonstrated that the approach to deal with a bully is to hit hard.

But if the EU hesitates, if it continues to issue diplomatic communications, to impose token fines, to hope for a improved situation, it will have already lost.