Europe's Hidden Tool to Counter US Economic Coercion: Moment to Deploy It

Can European leadership ever confront the US administration and US big tech? Present passivity goes beyond a legal or financial failure: it represents a ethical failure. This inaction throws into question the core principles of Europe's democratic identity. The central issue is not merely the future of companies like Google or Meta, but the principle that Europe has the authority to regulate its own digital space according to its own regulations.

Background Context

First, consider the events leading here. In late July, the EU executive accepted a humiliating deal with Trump that established a permanent 15% tariff on European goods to the US. The EU gained no concessions in return. The indignity was compounded because the EU also agreed to provide well over $1tn to the US through financial commitments and acquisitions of resources and defense equipment. The deal exposed the vulnerability of Europe's dependence 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 unanswerable sway in international commerce. But in the six weeks since Trump's threat, the EU has done little. Not a single counter-action has been taken. No activation of the recently created trade defense tool, the often described “trade bazooka” that the EU once promised would be its ultimate shield against foreign pressure.

Instead, we have polite statements and a fine on Google of less than 1% of its yearly income for established market abuses, previously established in US courts, that enabled it to “exploit” its market leadership in Europe's advertising market.

American Strategy

The US, under the current administration, has signaled its goals: it does not aim to strengthen European democracy. It aims to undermine it. A recent essay published on the US State Department website, written in alarmist, inflammatory language reminiscent of Hungarian leadership, charged Europe of “an aggressive campaign against democratic values itself”. It criticized alleged limitations on authoritarian parties across the EU, from the AfD in Germany to Polish organizations.

Available Tools for Response

What is to be done? The EU's trade defense mechanism works by assessing the extent of the coercion and imposing counter-actions. Provided most European governments consent, the European Commission could kick US products out of Europe's market, or apply tariffs on them. It can strip their patents and copyrights, block their financial activities and require compensation as a condition of readmittance to Europe's market.

The tool is not merely economic retaliation; it is a statement of political will. It was created to demonstrate that Europe would never tolerate external pressure. But now, when it is most crucial, it remains inactive. It is not a bazooka. It is a paperweight.

Political Divisions

In the period preceding the transatlantic agreement, several EU states talked tough in official statements, but did not advocate the instrument to be activated. Some nations, including Ireland and Italy, publicly pushed for a softer European line.

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

Broader Digital Strategy

The public – not the algorithms of international billionaires beholden to foreign interests – should have the freedom to decide for themselves about what they see and share online.

The US administration is pressuring the EU to water down its digital rulebook. But now more than ever, the EU should make large US tech firms accountable for distorting competition, snooping on Europeans, and preying on our children. EU authorities must ensure Ireland accountable for failing to enforce EU digital rules on American companies.

Enforcement is insufficient, however. The EU must progressively replace all foreign “major technology” services and computing infrastructure over the coming years with European solutions.

Risks of Delay

The significant risk of the current situation is that if Europe does not act now, it will never act again. The more delay occurs, the deeper the decline of its confidence in itself. The increasing acceptance that opposition is pointless. The greater the tendency that its regulations are not binding, its governmental bodies lacking autonomy, its democracy not self-determined.

When that happens, the route to undemocratic rule becomes unavoidable, through automated influence on social media and the acceptance of misinformation. If the EU continues to cower, it will be drawn into that same decline. The EU must take immediate steps, not just to push back against Trump, but to create space for itself to function as a independent and autonomous power.

International Perspective

And in doing so, it must plant a flag that the international community can see. In Canada, South Korea and Japan, democratic nations are watching. They are wondering if the EU, the remaining stronghold of liberal multilateralism, will stand against foreign pressure or surrender to it.

They are asking whether democratic institutions can endure when the leading democratic nation in the world turns its back on them. They also see the model of Lula in Brazil, who confronted Trump and showed that the way to deal with a aggressor is to hit hard.

But if the EU delays, if it continues to issue polite statements, to impose token fines, to anticipate a improved situation, it will have effectively surrendered.

David Lewis
David Lewis

A passionate gaming enthusiast and writer, sharing expert advice on casino games and strategies.