The EU's Covert Tool to Address US Economic Bullying: Time to Activate It

Will Brussels ever confront the US administration and American tech giants? Present lack of response is not just a legal or economic failure: it represents a moral collapse. This situation calls into question the core principles of Europe's political sovereignty. The central issue is not only the fate of firms such as Google or Meta, but the fundamental idea that Europe has the authority to govern its own online environment according to its own regulations.

Background Context

To begin, consider the events leading here. In late July, the EU executive agreed to a humiliating deal with the US that established a ongoing 15% tax on European goods to the US. Europe received nothing in return. The embarrassment was all the greater because the EU also agreed to direct well over $1tn to the US through investments and acquisitions of resources and defense equipment. The deal exposed the vulnerability of Europe's reliance on the US.

Less than a month later, Trump threatened severe additional taxes if the EU enforced its laws against US tech firms on its own territory.

The Gap Between Rhetoric and Action

For decades EU officials has claimed that its economic zone of 450 million affluent people gives it unanswerable sway in international commerce. But in the month and a half since the US warning, the EU has taken minimal action. No counter-action has been implemented. No invocation of the new anti-coercion instrument, the so-called “trade bazooka” that the EU once promised would be its ultimate shield against external coercion.

Instead, we have polite statements and a fine on Google of under 1% of its annual revenue for longstanding 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 made its intentions clear: it no longer seeks to strengthen EU institutions. It seeks to weaken it. A recent essay published on the US State Department website, written in paranoid, inflammatory rhetoric similar to Hungarian leadership, accused Europe of “systematic efforts against Western civilization 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 assessing the extent of the coercion and imposing retaliatory measures. If most European governments agree, the EU executive could kick US products out of the EU market, or apply taxes on them. It can remove their intellectual property rights, prevent their investments and demand compensation as a condition of readmittance to Europe's market.

The tool is not only financial response; it is a declaration of determination. It was created to demonstrate that Europe would never tolerate foreign coercion. But now, when it is most crucial, it lies unused. It is not the powerful weapon promised. It is a symbolic object.

Internal Disagreements

In the months preceding the transatlantic agreement, many European governments used strong language in official statements, but did not advocate the instrument to be activated. Others, such as Ireland and Italy, publicly pushed for a softer European line.

A softer line is the last thing that Europe needs. It must implement its laws, even when they are inconvenient. In addition to the trade tool, the EU should shut down social media “recommended”-style algorithms, that recommend material the user has not requested, on EU territory until they are proven safe for democracy.

Broader Digital Strategy

Citizens – not the automated systems of international billionaires beholden to foreign interests – should have the autonomy to decide for themselves about what they see and distribute online.

The US administration is pressuring the EU to water down its digital rulebook. But now more than ever, Europe should make large US tech firms responsible 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 US firms.

Enforcement is not enough, however. Europe must progressively replace all non-EU “big tech” services and cloud services over the next decade with homegrown alternatives.

Risks of Delay

The real danger of the current situation is that if the EU does not take immediate action, it will never act again. The longer it waits, the more profound the decline of its self-belief in itself. The more it will believe that resistance is futile. The more it will accept that its regulations are not binding, its governmental bodies lacking autonomy, its political system dependent.

When that occurs, the path to undemocratic rule becomes inevitable, through algorithmic manipulation on social media and the normalisation of misinformation. If the EU continues to remain passive, it will be pulled toward that same abyss. The EU must act now, not just to resist Trump, but to create space for itself to exist as a independent and sovereign entity.

Global Implications

And in taking action, it must make a statement that the rest of the world can see. In Canada, South Korea and Japan, democracies are watching. They are questioning if the EU, the remaining stronghold of liberal multilateralism, will resist external influence or surrender to it.

They are inquiring whether democratic institutions can endure when the leading democratic nation in the world abandons them. They also see the example of Lula in Brazil, who faced down Trump and showed that the way to address a aggressor is to respond firmly.

But if the EU hesitates, if it continues to release diplomatic communications, to levy symbolic penalties, to anticipate a improved situation, it will have already lost.

Daisy Jones
Daisy Jones

A passionate writer and life coach dedicated to helping others unlock their potential through actionable advice and inspiring stories.