The EU's Secret Tool to Address Trump's Trade Coercion: Moment to Activate It

Will Brussels ever resist the US administration and US big tech? The current passivity is not just a legal or financial shortcoming: it constitutes a ethical failure. This inaction throws into question the very foundation of Europe's political sovereignty. The central issue is not merely the fate of firms such as Google or Meta, but the principle that the European Union has the authority to govern its own digital space according to its own rules.

How We Got Here

First, let us recount how we got here. During the summer, the EU executive agreed to a humiliating deal with the US that locked in a permanent 15% tax on EU exports to the US. The EU received nothing in return. The indignity was all the greater because the EU also agreed to provide well over $1tn to the US through investments and purchases of energy and defense equipment. This arrangement exposed the fragility of the EU's reliance on the US.

Less than a month later, Trump threatened severe new tariffs if the EU implemented its laws against American companies on its own territory.

Europe's Claim vs. Reality

For decades EU officials has claimed that its economic zone of 450 million affluent people gives it significant sway in international commerce. But in the month and a half since the US warning, the EU has taken minimal action. Not a single retaliatory measure has been implemented. No invocation of the new anti-coercion instrument, the so-called “trade bazooka” that the EU once promised would be its ultimate protection against external coercion.

Instead, we have polite statements and a fine on Google of under 1% of its annual revenue for established market abuses, already proven in American legal proceedings, that enabled it to “abuse” its dominant position in the EU's digital ad space.

US Intentions

The US, under the current administration, has signaled its goals: it no longer seeks to support EU institutions. It seeks to undermine it. A recent essay published on the US Department of State's website, written in paranoid, inflammatory rhetoric similar to Hungarian leadership, accused the EU of “an aggressive campaign against democratic values itself”. It condemned alleged restrictions on authoritarian parties 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 works by calculating the degree of the pressure and applying retaliatory measures. If most European governments consent, the European Commission could kick US products out of the EU market, or apply tariffs on them. It can remove their patents and copyrights, block their investments and require reparations as a requirement of readmittance to EU economic space.

The instrument is not only financial response; it is a declaration of determination. It was designed to demonstrate that the EU would never tolerate external pressure. But now, when it is needed most, it remains inactive. It is not the powerful weapon promised. It is a paperweight.

Internal Disagreements

In the period leading to the transatlantic agreement, several EU states talked tough in official statements, but failed to push for the instrument to be used. Others, including Ireland and Italy, openly advocated a softer European line.

Compromise is the worst option that the EU needs. It must implement its regulations, even when they are inconvenient. In addition to the anti-coercion instrument, Europe should shut down social media “for you”-style systems, that suggest material the user has not asked for, on EU territory until they are proven safe for democracy.

Comprehensive Approach

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

Trump is pressuring the EU to water down its online regulations. But now especially important, the EU should make American technology companies accountable for anti-competitive market rigging, surveillance practices, and preying on our children. Brussels must ensure Ireland accountable for failing to enforce Europe's online regulations on US firms.

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

The Danger of Inaction

The real danger of the current situation is that if Europe does not act now, it will never act again. The more delay occurs, the more profound the decline of its confidence in itself. The more it will believe that opposition is pointless. The more it will accept that its regulations are not binding, its institutions not sovereign, its political system dependent.

When that occurs, the path to authoritarianism becomes unavoidable, through algorithmic manipulation on social media and the acceptance of lies. If Europe continues to cower, it will be pulled toward that same decline. The EU must take immediate steps, not only to resist US pressure, but to establish conditions for itself to function as a independent and sovereign entity.

Global Implications

And in doing so, it must make a statement that the international community can see. In North America, South Korea and Japan, 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 asking whether representative governments can survive when the most powerful democracy in the world abandons them. They also see the model of Lula in Brazil, who faced down US pressure and showed that the way to address a aggressor is to respond firmly.

But if the EU delays, if it continues to release polite statements, to impose token fines, to anticipate a better future, it will have already lost.