The European Union has spent years exploiting its trade relationship with the United States while ignoring the obligations that should come with it. President Trump has rightly made clear that this era of U.S. indulgence is over.
So far, the EU seems unwilling to give up its present arrangement. Despite months of negotiations, European leaders have refused to offer meaningful concessions, especially on their campaign of digital protectionism aimed at American firms. In response, Trump recommended a straight 50 percent tariff on the European Union. After the European Commission asked for more time, the Trump administration agreed on May 25 to delay enforcement until July 9. But if Europe won鈥檛 change course, the U.S. is prepared to take necessary measures to rebalance the relationship.
This standoff exposes an uncomfortable truth: We鈥檝e long expected unfair and predatory trade practices from adversaries like China, but we鈥檝e been slower to recognize similar behavior from Europe. That has to change.
For too long, Europe has leaned heavily on American defense spending and economic output while offering little in return. Whether through underfunded NATO contributions or lopsided trade arrangements, the U.S. has effectively underwritten European stability.
And now, European governments are implementing policies that disadvantage American tech companies in favor of their own through tariffs, taxes, and regulations. These policies further strain what should be a mutual partnership.
One example is the new wave of state-backed initiatives. Europe simply cannot keep up with America鈥檚 technological innovation, so it uses projects like Gaia-X and EuroStack to displace American cloud infrastructure with European alternatives. Nothing about these initiatives is driven by innovation or competitiveness. These companies are propped up by massive public subsidies and enjoy regulatory protections that tilt the playing field in their favor. European nations are trying to legislate these companies into relevance at the expense of U.S. firms.
Tax policy has become another tool of discrimination. Take the Digital Services Tax (DST), a levy common throughout Europe. Unlike standard corporate taxes, the DST is applied to revenue, not profit. This forces even unprofitable firms to pay. Thresholds for taxation are set high enough to exempt most European companies while capturing nearly every major U.S. tech company. France alone collected more than $640 million in DST revenue in 2022. France unapologetically branded its GAFA tax after the very companies 鈥 Google, Amazon, Facebook, and Apple 鈥 it was crafted to hit.
Then there are the Digital Services Act (DSA) and Digital Markets Act (DMA). These were sold by the European Commission as neutral frameworks for reining in Big Tech. In reality, they鈥檙e strategic tools for handicapping U.S. firms while protecting underperforming European ones. The DMA, for example, forces the largest digital tech platforms, and only those select platforms, to comply with a list of 鈥渄os and don鈥檛s鈥 that impose mandates for interoperability with other products and customer access to data while prohibiting mechanisms that would create preferential treatment of their products or dissuade customers from leaving. The law conveniently targets companies that are overwhelmingly American 鈥 six of the seven named firms, to be exact.
Meanwhile, the DSA hands European regulators sweeping authority to police online speech. It forces American platforms such as Facebook and Google to comply with vague, arbitrary rules about what鈥檚 鈥渉armful鈥 or 鈥渋llegal.鈥 In practice, that means censoring content to fit Europe鈥檚 political preferences. This from a bloc where free speech is already under strain. Now Europe wants to make its censorship our problem, too.
Europe can鈥檛 have it both ways: relying on American technological leadership while building an entire policy framework around curbing it.
What makes this worse is Europe鈥檚 reluctance to take similar action against Chinese firms with well-documented ties to the Chinese Communist Party. CCP-run companies such as Huawei and ZTE continue to operate in European markets with little pushback. Germany鈥檚 state-funded Deutsche Telekom still partners with China Unicom. The U.K.鈥檚 Vodafone merged with a Chinese-owned company just last year. 5G technology, critical for the future of global telecom networks, is now increasingly under China鈥檚 control thanks to Europe鈥檚 reluctance to act.
There is no strategic logic in punishing American companies while giving CCP-linked firms a pass. The U.S. is doing what it can to limit Chinese influence in global technology and protect Western national security. But Europe is undermining that effort by deepening its own commercial ties with Beijing.
None of this reflects a balanced partnership. It reflects a coalition that wants the benefits of U.S. leadership without the obligations that come with it.
It鈥檚 not unfair to stop others from taking advantage of us. It is unfair to expect one side to keep sacrificing jobs, innovation, and global standing to subsidize the other. If Europe is truly committed to partnership, it should welcome a rebalancing 鈥 specifically, one that stops targeting American tech innovation while rewarding its adversaries.
If not, then at least let鈥檚 stop pretending that the current arrangement is anything but one-sided.