EU defends sovereign right to regulate tech against Trump's latest tariff threat

The fragile alliance between the European Union and the United States took a new turn for the worse after Donald Trump unexpectedly threatened to impose "substantial additional tariffs" on countries that implement legislation targeting American tech companies, "unless these discriminatory actions are removed".

Trump did not specify the level of the potential tariffs.

"American Technology Companies are neither the 'piggy bank' nor the 'doormat' of the World any longer. Show respect to America and our amazing Tech Companies or consider the consequences!" Trump said on Monday in a social media message.

The European Commission, which appeared caught off guard by the extraordinary warning issued by the White House, responded by defending its right to pass legislation free from external pressure.

"It is the sovereign right of the EU and its member states to regulate economic activities on our territory, which are consistent with our democratic values," Paula Pinho, the Commission's chief spokesperson, said on Tuesday.

"These are separate questions."

Trump's comments cast serious doubt over the viability of the trade deal that the EU and the US signed in late July to avoid an all-out commercial war. Under the agreement, the majority of EU goods are subject to a 15% rate, which is supposed to be "all-inclusive", meaning further duties, such as those threatened by Trump, should not apply on top.

It also includes non-binding pledges to spend $750 billion on American energy, invest $600 billion in the American market and purchase $40 billion of American chips.

"We believe this deal indeed has provided for predictability and stability. We have a clear framework on which we are working," Pinho said. "Any other measures which fall out of the scope of this framework agreement at this stage are merely speculative."

As part of the trade talks, the Commission refused to make concessions on tech regulation, such as the Digital Services Act (DSA), which is meant to combat illegal content and disinformation online; the Digital Markets Act (DMA), which aims to guarantee free and fair competition; and the Artificial Intelligence Act, which sets out rules for AI systems considered to pose risks to human safety and human rights.

Apple, Meta and Alphabet are being investigated under the DMA, while X (formerly Twitter) and Meta's Instagram and Facebook services are the object of DSA probes. All of these companies have deepened ties with the White House in recent months, with some of their CEOs photographed first row at Trump's inauguration in January.

Silicon Valley has long complained about the scope and application of EU tech laws, a position that US officials have echoed by classifying them as "non-tariff barriers".

The spectre of sanctions

In the face of pressure, Brussels says it did not budge.

Over the weekend, Ursula von der Leyen, the European Commission president, published an op-ed in several European newspapers admitting the agreement was "solid but imperfect" while insisting the bloc had retained its right to legislate.

"The EU has stood firm on its core principles. Our rules remain intact," von der Leyen wrote. "We are the ones who decide how best to safeguard food safety, protect European citizens online, and ensure their health and safety."

But Trump's latest threat makes it clear the American president does not consider the matter settled and is ready to exert hard power to effect the change he desires.

"I will stand up to Countries that attack our incredible American Tech Companies. Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology," Trump wrote.

"They also, outrageously, give a complete pass to China's largest Tech Companies. This must end, and end NOW!"

His message came just hours after Reuters, citing unnamed sources, reported the US was considering sanctioning EU and national officials responsible for implementing the DSA, which Republicans have frequently equated to a tool of censorship.

"We are monitoring increasing censorship in Europe with great concern, but have no further information to provide at this time," the US State Department told Euronews.

The Commission firmly rejected this characterisation as "completely wrong and completely unfounded", arguing that the DSA and the DMA respect freedom of information and treat all firms equally "irrespective of their place of establishment".

"More than 99% of content moderation decisions taken here in the EU online are proactively done by platforms based on their own terms and conditions," said Thomas Régnier, the Commission's spokesperson for digital matters.

"We're not asking platforms to remove content, we're asking them to enforce their own terms and conditions."

Régnier said Commission officials working on the DSA had received guidance on how to treat "market-sensitive information", but not related to sanctions or travel to the US.