The EU's Covert Instrument to Combat US Economic Coercion: Time to Utilize It

Can European leadership finally stand up to Donald Trump and American tech giants? The current lack of response goes beyond a regulatory or economic shortcoming: it constitutes a moral failure. This inaction undermines the core principles of the EU's political sovereignty. What is at stake is not only the fate of companies like Google or Meta, but the principle that Europe has the right to regulate its own online environment according to its own regulations.

Background Context

First, consider how we got here. During the summer, the EU executive accepted a one-sided deal with the US that locked in a ongoing 15% tariff on European goods to the US. Europe gained no concessions in return. The embarrassment 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 revealed the vulnerability of the EU's reliance on the US.

Soon after, Trump threatened severe additional taxes 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 claimed that its economic zone of 450 million affluent people gives it unanswerable leverage in trade negotiations. But in the six weeks since Trump's threat, Europe has done little. Not a single retaliatory measure has been taken. No invocation of the recently created anti-coercion instrument, the so-called “trade bazooka” that the EU once promised would be its primary shield against foreign pressure.

By contrast, we have diplomatic language and a fine on Google of less than 1% of its yearly income for longstanding market abuses, previously established in American legal proceedings, that allowed it to “exploit” its dominant position in Europe's digital ad space.

American Strategy

The US, under Trump's leadership, has made its intentions clear: it no longer seeks to support European democracy. It aims to undermine it. An official publication published on the US State Department platform, composed in alarmist, bombastic rhetoric similar to Viktor Orbán's speeches, charged the EU of “an aggressive campaign against democratic values itself”. It condemned alleged limitations on political groups across the EU, from the AfD in Germany to PiS in Poland.

Available Tools for Response

How should Europe respond? The EU's trade defense mechanism works by assessing the extent of the coercion and imposing retaliatory measures. If EU member states consent, the European Commission could kick US goods and services out of the EU market, or impose tariffs on them. It can remove their patents and copyrights, block their investments and demand reparations as a condition of readmittance to Europe's market.

The instrument is not only economic retaliation; it is a declaration of political will. It was created to signal 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, several EU states used strong language in official statements, but failed to push for the instrument to be activated. Others, such as Ireland and Italy, openly advocated more conciliatory approach.

A softer line is the last thing that the EU needs. It must enforce its regulations, even when they are inconvenient. In addition to the anti-coercion instrument, the EU should disable social media “recommended”-style algorithms, that recommend material the user has not requested, on EU territory until they are proven safe for democratic societies.

Broader Digital Strategy

The public – not the algorithms of international billionaires serving external agendas – should have the freedom to make independent choices about what they see and share online.

Trump is pressuring the EU to water down its online regulations. But now more than ever, Europe should hold large US tech firms accountable for anti-competitive market rigging, snooping on Europeans, and targeting minors. Brussels must ensure Ireland accountable for failing to enforce EU digital rules on US firms.

Enforcement is insufficient, however. The EU must progressively replace all non-EU “big tech” platforms and computing infrastructure over the coming years with European solutions.

The Danger of Inaction

The real danger of the current situation is that if Europe does not act now, it will become permanently passive. The more delay occurs, the deeper the erosion of its confidence in itself. The increasing acceptance that resistance is futile. The greater the tendency that its regulations are unenforceable, its institutions lacking autonomy, its political system dependent.

When that happens, the route to authoritarianism becomes inevitable, through algorithmic manipulation on social media and the normalisation of misinformation. If Europe continues to remain passive, it will be drawn into that same abyss. Europe must take immediate steps, not only to resist US pressure, but to create space for itself to exist as a free and autonomous power.

International Perspective

And in taking action, it must make a statement that the international community can see. In Canada, Asia and Japan, democracies are observing. They are questioning if the EU, the last bastion of liberal multilateralism, will stand against external influence or surrender to it.

They are asking whether democratic institutions can survive when the leading democratic nation in the world abandons them. They also see the example of Lula in Brazil, who confronted US pressure and demonstrated that the approach to deal with a bully is to respond firmly.

But if Europe hesitates, if it continues to release diplomatic communications, to impose symbolic penalties, to hope for a better future, it will have already lost.

Thomas Cuevas
Thomas Cuevas

An avid outdoor enthusiast and travel writer with a passion for exploring Sardinia's natural landscapes and sharing adventure tips.