The EU's Secret Tool to Counter US Economic Bullying: Moment to Activate It

Will the EU finally resist Donald Trump and American tech giants? The current passivity goes beyond a legal or economic shortcoming: it constitutes a ethical failure. This situation throws into question the core principles of Europe's political sovereignty. The central issue is not merely the fate of companies like Google or Meta, but the fundamental idea that Europe has the right to govern its own digital space according to its own laws.

Background Context

First, consider how we got here. In late July, the EU executive agreed to a one-sided agreement with the US that established a ongoing 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 the EU's reliance on the US.

Soon after, Trump threatened crushing additional taxes if Europe enforced its regulations against US tech firms on its own territory.

Europe's Claim vs. Reality

Over many years EU officials has claimed that its market of 450 million affluent people gives it unanswerable leverage in trade negotiations. But in the month and a half since the US warning, Europe has done little. Not a single counter-action has been implemented. No invocation of the recently created anti-coercion instrument, the so-called “trade bazooka” that Brussels once vowed would be its primary shield against foreign pressure.

By contrast, we have polite statements and a penalty on Google of under 1% of its annual revenue for longstanding market abuses, previously established in US courts, that enabled it to “exploit” its dominant position in Europe's digital ad space.

US Intentions

The US, under Trump's leadership, has made its intentions clear: it no longer seeks to strengthen European democracy. It aims to weaken it. A recent essay released on the US Department of State's platform, written in alarmist, inflammatory language similar to Viktor Orbán's speeches, charged Europe of “an aggressive campaign against democratic values itself”. It condemned alleged restrictions on authoritarian parties across the EU, from the AfD in Germany to Polish organizations.

The Solution: Anti-Coercion Instrument

How should Europe respond? The EU's anti-coercion instrument functions through assessing the degree of the coercion and imposing retaliatory measures. If EU member states agree, the EU executive could kick US goods and services out of the EU market, or impose tariffs on them. It can strip their patents and copyrights, block their financial activities and demand reparations as a condition of re-entry to Europe's market.

The tool is not only economic retaliation; it is a declaration of determination. It was designed to demonstrate that Europe would never tolerate external pressure. But now, when it is needed most, it lies unused. It is not a bazooka. It is a symbolic object.

Internal Disagreements

In the period leading to the transatlantic agreement, many European governments used strong language in public, but did not advocate the mechanism to be used. Some nations, such as Ireland and Italy, openly advocated a softer European line.

A softer line is the last thing 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 “for you”-style algorithms, that recommend material the user has not requested, on European soil until they are proven safe for democracy.

Comprehensive Approach

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

The US administration is putting Europe under pressure to water down its digital rulebook. But now more than ever, Europe should make large US tech firms responsible for distorting competition, surveillance practices, and targeting minors. EU authorities must hold Ireland responsible for not implementing Europe's digital rules on American companies.

Regulatory action is insufficient, however. Europe must gradually substitute all non-EU “major technology” platforms 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 longer it waits, the deeper the erosion of its self-belief in itself. The increasing acceptance that resistance is futile. The greater the tendency that its laws are unenforceable, its institutions not sovereign, its democracy not self-determined.

When that occurs, the path to undemocratic rule becomes inevitable, through automated influence on social media and the normalisation of misinformation. If the EU continues to remain passive, it will be pulled toward that same abyss. Europe must take immediate steps, not just to resist Trump, but to establish conditions for itself to function as a free and autonomous power.

International Perspective

And in doing so, it must make a statement that the international community can see. In North America, South Korea and Japan, democratic nations are watching. They are questioning if the EU, the remaining stronghold of international cooperation, will stand against external influence or yield to it.

They are asking whether representative governments can endure when the most powerful democracy in the world abandons them. They also see the model of Lula in Brazil, who confronted Trump and demonstrated that the approach to deal with a bully is to respond firmly.

But if Europe hesitates, if it continues to issue polite statements, to impose symbolic penalties, to hope for a improved situation, it will have effectively surrendered.