The EU's Covert Instrument to Address Trump's Economic Pressure: Time to Utilize It

Will European leadership ever resist the US administration and US big tech? The current inaction is not just a legal or financial failure: it represents a ethical collapse. This situation undermines the very foundation of the EU's political sovereignty. The central issue is not merely the fate of firms such as Google or Meta, but the fundamental idea that Europe has the authority to govern its own digital space according to its own laws.

How We Got Here

To begin, consider the events leading here. In late July, the European Commission agreed to a humiliating agreement with the US that locked in a permanent 15% tax on European goods to the US. Europe received nothing in return. The embarrassment was all the greater because the commission also agreed to direct well over $1tn to the US through financial commitments and acquisitions of energy and defense equipment. The deal exposed the vulnerability of the EU's dependence on the US.

Less than a month later, the US administration warned of crushing new tariffs if Europe implemented its regulations against US tech firms on its own soil.

The Gap Between Rhetoric and Action

Over many years EU officials has claimed that its market of 450 million affluent people gives it significant leverage in trade negotiations. But in the month and a half since Trump's threat, the EU has taken minimal action. No retaliatory measure has been taken. No activation of the recently created anti-coercion instrument, the often described “trade bazooka” that the EU once vowed would be its primary shield against foreign pressure.

Instead, we have polite statements and a penalty on Google of less than 1% of its yearly income for longstanding market abuses, already proven in US courts, that allowed it to “exploit” its market leadership in the EU's digital ad space.

American Strategy

The US, under Trump's leadership, has signaled its goals: it does not aim to support European democracy. It seeks to weaken it. A recent essay published on the US Department of State's platform, written in paranoid, inflammatory language reminiscent of Hungarian leadership, charged Europe of “systematic efforts against Western civilization itself”. It criticized alleged restrictions on political groups across the EU, from the AfD in Germany to PiS in Poland.

The Solution: Anti-Coercion Instrument

How should Europe respond? Europe's anti-coercion instrument functions through calculating the extent of the pressure and imposing counter-actions. If most European governments consent, the EU executive could kick US products out of the EU market, or apply taxes on them. It can remove their patents and copyrights, block their investments and require compensation as a condition of re-entry to Europe's market.

The instrument is not merely financial response; it is a declaration of political will. It was created to demonstrate that Europe would never tolerate foreign coercion. But now, when it is needed most, it remains inactive. It is not a bazooka. It is a paperweight.

Internal Disagreements

In the period preceding the transatlantic agreement, several EU states talked tough in public, but failed to push for the mechanism to be used. Some nations, such as Ireland and Italy, publicly pushed for more conciliatory approach.

Compromise is the worst option that the EU needs. It must enforce its laws, even when they are challenging. Along with the anti-coercion instrument, the EU should disable social media “recommended”-style systems, that recommend content the user has not requested, on EU territory until they are demonstrated to be secure for democratic societies.

Comprehensive Approach

The public – not the automated systems of foreign oligarchs serving external agendas – should have the freedom to decide for themselves about what they view and share online.

The US administration is pressuring the EU to weaken its digital rulebook. But now especially important, the EU should make large US tech firms accountable for anti-competitive market rigging, surveillance practices, and preying on our children. Brussels must ensure Ireland responsible for not implementing Europe's online regulations on American companies.

Regulatory action is insufficient, however. Europe must progressively replace all non-EU “big tech” services and cloud services over the next decade with homegrown alternatives.

The Danger of Inaction

The real danger of this moment is that if the EU does not take immediate action, it will become permanently passive. 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 greater the tendency that its laws are not binding, its institutions lacking autonomy, its democracy not self-determined.

When that occurs, the path to authoritarianism becomes inevitable, through algorithmic manipulation on social media and the acceptance of lies. If the EU continues to remain passive, it will be drawn into that same decline. The EU must act now, not just to push back against Trump, but to establish conditions for itself to exist as a independent and sovereign entity.

Global Implications

And in taking action, it must plant a flag that the rest of the world can see. In Canada, South Korea and East Asia, democracies are observing. They are questioning if the EU, the remaining stronghold of liberal multilateralism, will resist foreign pressure or surrender to it.

They are inquiring whether democratic institutions can survive when the leading democratic nation in the world abandons them. They also see the model of Lula in Brazil, who confronted US pressure and showed that the approach to address a aggressor is to respond firmly.

But if Europe delays, if it continues to release polite statements, to levy symbolic penalties, to anticipate a better future, it will have effectively surrendered.