The EU's Covert Instrument to Counter US Economic Bullying: Time to Activate It

Will European leadership ever resist the US administration and American tech giants? Present passivity goes beyond a regulatory or financial shortcoming: it represents a ethical collapse. This situation throws into question the core principles of Europe's democratic identity. What is at stake is not only the fate of firms such as Google or Meta, but the principle that the European Union has the right to govern its own online environment according to its own regulations.

The Path to This Point

First, let us recount the events leading here. During the summer, the European Commission accepted a humiliating agreement with the US that established a ongoing 15% tax on EU exports to the US. The EU gained no concessions in return. The embarrassment was all the greater because the commission also agreed to provide well over $1tn to the US through financial commitments and purchases of resources and military materiel. The deal exposed the vulnerability of Europe's reliance on the US.

Less than a month later, the US administration threatened severe new tariffs if Europe enforced its laws against US tech firms on its own soil.

The Gap Between Rhetoric and Action

Over many years EU officials has asserted that its economic zone of 450 million rich people gives it significant sway in international commerce. But in the month and a half since the US warning, Europe has done little. Not a single retaliatory measure has been taken. No activation of the recently created anti-coercion instrument, the so-called “trade bazooka” that Brussels once promised would be its primary shield against external coercion.

By contrast, we have polite statements 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 “exploit” its market leadership in the EU's digital ad space.

US Intentions

The US, under Trump's leadership, has signaled its goals: it no longer seeks to support European democracy. It seeks to weaken it. An official publication published on the US State Department platform, written in alarmist, bombastic language similar to Viktor Orbán's speeches, accused Europe of “an aggressive campaign against democratic values itself”. It criticized supposed restrictions on authoritarian parties across the EU, from German political movements to Polish organizations.

Available Tools for Response

What is to be done? The EU's trade defense mechanism works by assessing the degree of the pressure and imposing retaliatory measures. If most European governments consent, the European Commission could remove US goods and services out of Europe's market, or impose tariffs on them. It can remove their patents and copyrights, block their investments and demand compensation as a condition of re-entry to EU economic space.

The instrument is not merely 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 most crucial, it lies unused. It is not a bazooka. It is a symbolic object.

Political Divisions

In the period leading to the EU-US trade deal, several EU states used strong language in public, but failed to push for the instrument to be activated. Others, including Ireland and Italy, openly advocated a softer European line.

Compromise is the last thing that Europe needs. It must implement 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 European soil until they are proven safe for democracy.

Broader Digital Strategy

Citizens – not the automated systems of international billionaires serving foreign interests – should have the freedom to make independent choices about what they view and share online.

Trump is putting Europe under pressure to weaken its digital rulebook. But now especially important, Europe should hold American technology companies accountable for distorting competition, surveillance practices, and targeting minors. EU authorities must hold certain member states accountable for failing to enforce EU online regulations on American companies.

Enforcement is insufficient, however. Europe must progressively replace all foreign “major technology” platforms and cloud services over the coming years with European solutions.

Risks of Delay

The significant risk of this moment is that if Europe does not act now, it will never act again. The more delay occurs, the deeper the decline of its self-belief in itself. The more it will believe that opposition is pointless. The greater the tendency that its regulations are not binding, its institutions lacking autonomy, its democracy dependent.

When that happens, the route to undemocratic rule becomes inevitable, through automated influence on social media and the acceptance of misinformation. If Europe continues to cower, it will be pulled toward that same abyss. The EU must act now, not only to resist Trump, but to create space for itself to function as a independent and sovereign entity.

Global Implications

And in doing so, it must plant a flag that the international community can see. In Canada, South Korea and East Asia, democratic nations are observing. They are wondering if the EU, the remaining stronghold of international cooperation, will resist external influence or surrender to it.

They are asking whether democratic institutions can survive when the most powerful democracy in the world turns its back on them. They also see the example of Lula in Brazil, who confronted US pressure and showed that the approach to address a aggressor is to respond firmly.

But if the EU delays, if it continues to issue polite statements, to impose symbolic penalties, to hope for a better future, it will have already lost.