Europe's Covert Instrument to Combat Trump's Economic Coercion: Time to Utilize It

Will the EU ever confront the US administration and US big tech? Present lack of response is not just a legal or financial shortcoming: it constitutes a ethical failure. This inaction calls into question the very foundation of Europe's political sovereignty. What is at stake is not merely the fate of companies like Google or Meta, but the principle that the European Union has the right to govern its own online environment according to its own regulations.

Background Context

To begin, consider the events leading here. In late July, the European Commission agreed to a one-sided agreement with the US that established a permanent 15% tax on European goods to the US. The EU gained no concessions in return. The indignity was all the greater because the EU also agreed to direct more than $1tn to the US through financial commitments and acquisitions of resources and defense equipment. The deal revealed the vulnerability of the EU's reliance on the US.

Soon after, Trump threatened severe additional taxes if the EU enforced 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 unanswerable sway in trade negotiations. But in the six weeks since the US warning, Europe has done little. No retaliatory measure has been implemented. No invocation of the recently created trade defense tool, the so-called “trade bazooka” that the EU once vowed would be its primary protection against external coercion.

Instead, we have diplomatic language and a fine on Google of less than 1% of its annual revenue for longstanding anticompetitive behaviour, already proven in American legal proceedings, that enabled it to “abuse” its market leadership in Europe's digital ad space.

American Strategy

The US, under Trump's leadership, has made its intentions clear: it no longer seeks to support EU institutions. It aims to undermine it. A recent essay released on the US State Department platform, written in alarmist, bombastic rhetoric reminiscent of Hungarian leadership, accused the EU of “an aggressive campaign against democratic values itself”. It condemned alleged restrictions on political groups across the EU, from the AfD in Germany to PiS in Poland.

The Solution: Anti-Coercion Instrument

What is to be done? Europe's trade defense mechanism functions through assessing the degree of the coercion and imposing counter-actions. If EU member states agree, the EU executive could remove US goods and services out of the EU market, or apply taxes on them. It can remove their patents and copyrights, block their investments and demand reparations as a requirement of re-entry to Europe's market.

The instrument is not only financial response; it is a statement of political will. It was designed to signal that Europe would always resist foreign coercion. But now, when it is needed most, it lies unused. It is not the powerful weapon promised. It is a paperweight.

Internal Disagreements

In the months preceding the EU-US trade deal, many European governments used strong language in public, but failed to push for the instrument to be activated. Some nations, including Ireland and Italy, publicly pushed for more conciliatory approach.

A softer line is the last thing that the EU needs. It must enforce its regulations, even when they are inconvenient. In addition to the trade tool, the EU should disable social media “recommended”-style systems, that recommend material the user has not asked for, on EU territory until they are proven safe for democracy.

Broader Digital Strategy

The public – not the algorithms of foreign oligarchs beholden to external agendas – should have the autonomy to make independent choices about what they see and distribute online.

The US administration is putting Europe under pressure to weaken its online regulations. But now especially important, Europe should hold American technology companies responsible for distorting competition, snooping on Europeans, and preying on our children. Brussels must ensure certain member states responsible for not implementing Europe's online regulations on US firms.

Regulatory action is insufficient, however. The EU must progressively replace all foreign “big tech” services and cloud services 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 become permanently passive. The more delay occurs, the deeper the erosion of its confidence in itself. The increasing acceptance that resistance is futile. The more it will accept that its laws are unenforceable, its governmental bodies lacking autonomy, its political system not self-determined.

When that occurs, the route to authoritarianism becomes inevitable, through algorithmic manipulation on social media and the acceptance of misinformation. If the EU continues to remain passive, it will be drawn into that same decline. Europe must act now, not only to push back against Trump, but to create space for itself to function as a independent and sovereign entity.

International Perspective

And in taking action, it must plant a flag that the rest of the world can see. In North America, Asia and Japan, democracies are watching. They are wondering if the EU, the remaining stronghold of international cooperation, will resist external influence or yield to it.

They are inquiring whether representative governments 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 address a bully is to respond firmly.

But if the EU delays, if it continues to release polite statements, to impose token fines, to anticipate a improved situation, it will have already lost.

Steven Smith
Steven Smith

A passionate globetrotter and travel writer with over a decade of experience exploring hidden gems and sharing insights to make every journey unforgettable.

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