Europe's Secret Weapon to Combat US Economic Coercion: Time to Utilize It

Can European leadership ever confront the US administration and American tech giants? Present inaction is not just a regulatory or financial shortcoming: it constitutes a moral collapse. This situation throws into question the bedrock of Europe's political sovereignty. The central issue is not only the future of firms such as Google or Meta, but the principle that the European Union has the authority to govern its own online environment according to its own rules.

How We Got Here

To begin, let us recount how we got here. In late July, the European Commission agreed to a one-sided agreement with the US that locked in 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 commission also agreed to provide well over $1tn to the US through financial commitments and acquisitions of energy and defense equipment. This arrangement exposed the vulnerability of the EU's dependence on the US.

Soon after, the US administration threatened severe new tariffs if the EU enforced its laws against American companies on its own territory.

The Gap Between Rhetoric and Action

For decades EU officials has asserted that its market of 450 million rich people gives it significant sway in trade negotiations. But in the six weeks since the US warning, the EU has taken minimal action. Not a single counter-action has been implemented. No invocation of the recently created anti-coercion instrument, the so-called “trade bazooka” that the EU once vowed would be its primary protection against foreign pressure.

By contrast, we have polite statements and a penalty on Google of less than 1% of its yearly income for longstanding market abuses, previously established 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 signaled its goals: it no longer seeks to support European democracy. It aims to weaken it. A recent essay released on the US State Department platform, composed in alarmist, inflammatory rhetoric reminiscent of Hungarian leadership, accused the EU of “systematic efforts against democratic values itself”. It condemned alleged 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 calculating the extent of the coercion and applying retaliatory measures. If most European governments agree, the European Commission could kick US goods and services out of Europe's market, or impose taxes on them. It can remove their patents and copyrights, block their financial activities and require compensation as a requirement of re-entry to EU economic space.

The instrument is not only financial response; it is a declaration of political will. It was created to signal that the EU would never tolerate foreign coercion. 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 preceding the transatlantic agreement, several EU states talked tough in public, but did not advocate the instrument to be used. Others, including Ireland and Italy, publicly pushed for a softer European line.

Compromise is the worst option that Europe needs. It must enforce its laws, even when they are challenging. Along with the anti-coercion instrument, the EU should disable social media “for you”-style algorithms, that recommend content the user has not requested, on European soil until they are proven safe for democratic societies.

Comprehensive Approach

Citizens – not the automated systems of international billionaires beholden to external agendas – should have the freedom to make independent choices about what they see and share online.

The US administration is pressuring the EU to weaken its digital rulebook. But now especially important, Europe should hold large US tech firms accountable for anti-competitive market rigging, snooping on Europeans, and targeting minors. EU authorities must ensure certain member states accountable for failing to enforce EU digital rules on American companies.

Regulatory action is not enough, however. The EU must gradually substitute all non-EU “big tech” services and computing infrastructure over the coming years with European solutions.

The Danger of Inaction

The real danger 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 more it will accept that its laws are unenforceable, its institutions not sovereign, its political system not self-determined.

When that occurs, the path to authoritarianism becomes inevitable, through algorithmic manipulation on social media and the normalisation of misinformation. If Europe continues to cower, it will be drawn into that same abyss. Europe must act now, not just to push back against Trump, but to establish conditions for itself to exist as a independent and autonomous power.

Global Implications

And in doing so, it must plant a flag that the rest of the world can see. In Canada, South Korea and Japan, democratic nations are observing. They are wondering if the EU, the last bastion of international cooperation, will stand against foreign pressure or yield to it.

They are inquiring whether representative governments 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 faced down Trump and showed that the approach to address a bully is to respond firmly.

But if the EU hesitates, if it continues to release polite statements, to impose token fines, to anticipate a improved situation, it will have effectively surrendered.

Michelle Howard
Michelle Howard

An Italian chef and food writer passionate about sharing traditional recipes and modern twists on classic dishes.