Europe's Hidden Tool to Combat US Economic Pressure: Time to Activate It

Can European leadership ever stand up to Donald Trump and American tech giants? The current passivity is not just a legal or financial shortcoming: it constitutes a moral failure. This situation calls into question the bedrock of the EU's political sovereignty. What is at stake is not merely the fate of firms such as Google or Meta, but the fundamental idea that Europe has the right to govern its own digital space according to its own laws.

How We Got Here

To begin, let us recount how we got here. In late July, the EU executive agreed to a one-sided deal with the US that locked in a permanent 15% tariff on European goods to the US. The EU received nothing in return. The indignity was compounded because the EU also consented to direct well over $1tn to the US through investments and purchases of energy and defense equipment. The deal exposed the fragility of Europe's reliance on the US.

Soon after, Trump warned of severe additional taxes if Europe implemented its laws against US tech firms on its own territory.

Europe's Claim vs. Reality

Over many years EU officials has claimed that its economic zone of 450 million affluent people gives it unanswerable sway in international commerce. But in the six weeks since the US warning, Europe has taken minimal action. Not a single retaliatory measure has been implemented. No invocation of the recently created anti-coercion instrument, the so-called “trade bazooka” that the EU once promised 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 longstanding anticompetitive behaviour, already proven in American legal proceedings, that enabled it to “abuse” its dominant position in the EU's advertising market.

American Strategy

The US, under the current administration, has made its intentions clear: it no longer seeks to support European democracy. It aims to weaken it. A recent essay released on the US Department of State's website, written in paranoid, inflammatory rhetoric reminiscent of Hungarian leadership, charged the EU of “an aggressive campaign against democratic values itself”. It condemned supposed restrictions on political groups across the EU, from German political movements to Polish organizations.

The Solution: Anti-Coercion Instrument

What is to be done? The EU's anti-coercion instrument works by calculating the degree of the coercion and imposing retaliatory measures. If EU member states agree, the European Commission could remove US products out of the EU market, or apply tariffs on them. It can remove their intellectual property rights, block their investments and demand reparations as a condition of readmittance to EU economic space.

The tool is not merely economic retaliation; it is a declaration of determination. It was created to demonstrate that the EU would always resist external pressure. But now, when it is needed most, it remains inactive. It is not the powerful weapon promised. It is a symbolic object.

Internal Disagreements

In the period leading to the EU-US trade deal, many European governments used strong language in public, but did not advocate the instrument to be activated. Others, such as Ireland and Italy, publicly pushed for more conciliatory approach.

Compromise is the worst option that the EU needs. It must implement its laws, even when they are inconvenient. Along with the anti-coercion instrument, the EU should shut down social media “recommended”-style systems, that recommend material the user has not asked for, on EU territory until they are proven safe for democracy.

Comprehensive Approach

Citizens – not the algorithms of foreign oligarchs beholden to foreign interests – 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, the EU should hold American technology companies responsible for distorting competition, surveillance practices, and targeting minors. EU authorities must ensure Ireland accountable for not implementing Europe's digital rules on American companies.

Regulatory action is not enough, however. The EU must progressively replace all non-EU “big tech” platforms and cloud services over the next decade with European solutions.

Risks of Delay

The real danger of this moment is that if the EU does not take immediate action, it will never act again. The longer it waits, the deeper the erosion of its self-belief in itself. The increasing acceptance that opposition is pointless. The greater the tendency that its regulations are unenforceable, its governmental bodies lacking autonomy, its democracy dependent.

When that occurs, the path to undemocratic rule becomes unavoidable, through algorithmic manipulation on social media and the acceptance of misinformation. If Europe continues to remain passive, it will be pulled toward that same abyss. Europe must take immediate steps, not only to push back against US pressure, but to create space for itself to function as a independent and autonomous power.

Global Implications

And in taking action, it must plant a flag that the international community can see. In Canada, South Korea and East Asia, democratic nations are observing. They are questioning if the EU, the remaining stronghold of liberal multilateralism, will stand against external influence or yield to it.

They are asking whether representative governments can endure when the leading democratic nation 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 address a bully is to respond firmly.

But if Europe hesitates, if it continues to issue polite statements, to impose token fines, to anticipate a better future, it will have already lost.