Following a year of intense trade disputes between the United States and the European Union, a new point of contention is poised to reignite tensions: the EU’s approach to technology regulation.
Central to this potential conflict is the EU’s Digital Services Act (DSA). This landmark legislation mandates that major tech companies actively police illegal and harmful content on their platforms. However, the Trump administration has consistently voiced strong opposition, claiming these regulations stifle free speech and create unjust hurdles for American businesses, frequently threatening retaliatory actions.
Now, there’s growing anxiety among European officials, both in private and public statements, that the current lull in trade hostilities might simply be the quiet before another storm, likely orchestrated by former President Trump.
French President Emmanuel Macron recently declared in an interview with European news outlets, ‘The U.S. will in the coming months — that’s certain — attack us over digital regulation.’ He hinted at the possibility of the U.S. imposing tariffs on the European Union specifically targeting the Digital Services Act.
President Trump and Ursula von der Leyen, the president of the European Union’s executive arm, in Scotland last year. Credit: Tierney L. Cross/The New York Times
This prediction has been echoed recently by voices within the Trump administration itself.
David Sacks, a White House official, described Europe’s online services regulation as ‘almost like a digital speed trap to try and fine American companies’ during a recent episode of his All-In podcast.
Sacks further elaborated, suggesting it could be seen as ‘effectively like a tariff on American tech companies operating in Europe.’ He warned that if this perception holds, it would inevitably ‘change the tariffs that we set’ in response.
Joining him on the podcast, Sarah B. Rogers, Under Secretary of State for Public Diplomacy, concurred, noting that ‘a lot of Americans see this as a tax.’
In a recent interview, Bill White, the U.S. Ambassador to Belgium, announced that Michael J. Rigas, a senior State Department official, is scheduled to visit Brussels in early March. The primary agenda for this trip is to engage with European Union officials on issues of free speech and digital regulation, a detail confirmed by the State Department’s press office.
The specific actions the United States might take, should it decide to challenge Europe’s digital regulations, remain uncertain, as does the list of potential target companies. However, some trade specialists suggest a ‘301 investigation’ as a likely avenue. This mechanism within U.S. trade law empowers the U.S. to levy tariffs, fees, or other penalties against nations deemed to engage in unfair trade practices.
While former President Trump previously utilized such investigations against China, his tactics against Europe have varied. Notably, his broad application of a trade weapon that permits widespread tariffs during a national emergency is currently under review by the Supreme Court, with a ruling potentially coming as early as this Friday.
What exact trigger might prompt the U.S. to take action, or if it will act at all, remains ambiguous.
Regulators in Brussels have been investigating several tech companies, including Google and Meta for possible violations of online competition and safety laws. Credit: Paulo Nunes dos Santos for The New York Times
For many months, the Trump administration has vaguely hinted at imposing tariffs or other sanctions on European companies if the bloc persists in enforcing its digital regulations. A memorandum from the U.S. Office of the Trade Representative last year indicated that they were actively exploring methods to penalize nations perceived as discriminating against American firms through digital services regulations.
In December, the U.S. Trade Representative’s office explicitly stated on X (formerly Twitter) that ‘if the E.U. and E.U. Member States insist on continuing to restrict, limit, and deter the competitiveness of U.S. service providers through discriminatory means, the United States will have no choice but to begin using every tool at its disposal to counter these unreasonable measures.’
The office also highlighted that American law allows for ‘the assessment of fees or restrictions on foreign services’ as a response. They have previously identified European companies such as Accenture, Spotify, and Capgemini, which operate in the United States, implying they could become targets.
Already, the United States has enacted travel bans against several individuals involved in digital regulation, including a former EU official.
When approached for comment, the U.S. trade office acknowledged that a US-EU trade agreement reached last year resolved numerous issues. However, they stressed that the Trump administration remains committed to ‘achieve fairness’ in digital trade and possesses ‘additional options’ if diplomatic negotiations fail.
Despite the threats, some experts believe the U.S. is unlikely to escalate action over Europe’s tech regulations, primarily because overall trade tensions between the two blocs have recently subsided. The European Parliament is even expected to move forward next week with approving last year’s trade deal, which includes 15 percent tariffs on many European goods.
Jacob Funk Kirkegaard, a senior fellow at the Brussels-based think tank Bruegel, commented, ‘I think the threshold for something major is very high.’
Nevertheless, Payne Griffin, a senior director at FTI Consulting, a business advisory firm, reported receiving inquiries from corporate clients curious about the potential fallout if the U.S. were to retaliate against Europe’s digital policies.
He noted, ‘Based on public comments from U.S. officials, taking action against E.U. digital services is one of the things they’ve thought about.’
EU officials are now in a precarious position, carefully considering whether the continued enforcement of their technology rules justifies the risk of further provoking the United States, particularly with critical issues like American involvement in the Ukraine conflict still unresolved.
To date, the European Commission, the EU’s executive body, has consistently affirmed its commitment to its digital regulations. Despite ongoing threats from the Trump administration, the Commission has actively continued its enforcement efforts in recent months.
For instance, in December, the Commission announced a €120 million (approximately $141 million) fine against X (formerly Twitter) due to transparency concerns. Furthermore, Brussels-based regulators have launched investigations into tech giants like Google and Meta for potential breaches of online competition and safety laws.
Ursula von der Leyen, President of the European Commission, emphatically stated at the recent Munich Security Conference, ‘I want to be very clear: our digital sovereignty is our digital sovereignty. We have a long tradition in freedom of speech. Actually the Enlightenment started on our continent.’
She concluded, asserting that Europe ‘will not flinch’ in its commitment to enforcing these digital rules.
Additional reporting for this article was provided by Adam Satariano from London, Catherine Porter from Paris, and Ana Swanson from Washington.