The E.U.’s Secret Weapon In Trump’s Trade War

by

In the ongoing trade disputes between Trump and Europe, the primary conflict has revolved around physical goods. For example, Trump’s tariffs on German cars and French champagne have led to retaliatory threats to increase taxes on various American alcohol and automobiles, including Kentucky bourbon and Harley Davidson motorcycles. However, services such as Netflix, Facebook, Google, Apple, or others (like Disney, Warner Bros., or Comcast), which serve hundreds of millions of Europeans, have yet to be brought into the fray.

However, if Trump continues to intensify the negotiations for new trade agreements with Europe, there might be shifts in the current situation. Europe, in response, may retaliate with potential sanctions that could significantly impact industries like Hollywood and Silicon Valley.

On April 23rd, the European Union handed out fines totaling €700 million ($800 million) to Apple and Meta for breaking the rules of their new antitrust law, the Digital Markets Act (DMA), which became active at the end of 2023. These penalties, which the firms are contesting, were smaller than anticipated, representing only a portion of the billions that European courts have previously ordered Google to pay for exploiting its market power – in September, Europe’s highest court ruled that Google must pay a €2.4B fine for violating EU antitrust regulations, and the company is currently challenging another €4.3B penalty.

Additional actions are being planned by European Union regulators towards Elon Musk’s company X, due to violations of the Digital Services Act (DSA), a groundbreaking law aimed at curbing online disinformation and hate speech. This action, specifically targeting one of Trump’s advisors, is expected to exacerbate the already strained relations between Brussels and Washington.

As a gamer, I’m not surprised to hear that the European Commission might be planning to fine X at this moment. It seems like they’re making a strategic move to show their readiness to respond, given the growing anti-European rhetoric from the U.S. administration.

As a fervent admirer, I’d like to share my perspective on recent developments in international politics, particularly involving tech magnates and European affairs. In his speech at the Munich Security Conference on February 14, U.S. Vice President JD Vance expressed concerns about the EU’s online regulation of hate speech and disinformation, viewing it as a potentially dangerous “internal threat” that outweighs perceived threats from powers like Russia or China.

Elon Musk, a key figure in this narrative, has waded into European politics directly, publicly accusing UK Prime Minister Keir Starmer of being an accomplice to child grooming gangs, and addressing a video message at a rally for the AfD, a far-right, anti-immigrant German party.

Interestingly, Musk’s peers in the tech industry – Mark Zuckerberg (Meta CEO), Jeff Bezos (Amazon founder), Sundar Pichai (Google CEO) – have shifted their stance since Trump’s presidency. They’ve stopped criticizing the President and are now actively advocating for Washington to challenge EU regulation.

According to Johnny Ryan, director of Enforce, a digital rights advocacy group located in Dublin, it appears that part of the plan involves undermining Europe’s liberal democracy. The main issue at hand is this ongoing attack on European liberal democracy. Unfortunately for Europe, all its media platforms and avenues for debate are currently controlled by American magnates who now answer to their president.

In light of the present course big tech is taking, European regulators seem to believe that the time to assert control over U.S. tech companies is now, according to Wilkinson. We’re at a critical juncture where these tech giants are no longer merely paying lip service to democratic values; instead, they are actively choosing to side against them, directly contradicting the principles of the European Union.

As a gamer, I’d say: “When it comes to protecting our digital playground, the EU’s top negotiator, Ursula von der Leyen, has shown she’s ready to stand her ground. She’s made it clear that if needed, we’ll expand the battlefield in the global trade dispute over services. On April 10th, von der Leyen warned that if necessary, she could activate what’s known as the ‘trade bazooka,’ or the anti-coercion instrument (ACI). This tool is designed to keep foreign powers from meddling with our democratic processes via trade policy. If activated, it gives us the authority to take action against international companies, potentially restricting or even blocking access of US media giants to European markets, and possibly limiting their intellectual property rights here.

According to Ronan Murphy, head of tech policy at the Center for European Policy Analysis, Von der Leyen is taking the most aggressive stance, demonstrating just how far the E.U. is prepared to act. This move is intended as a clear message to both those in the White House and those advocating for change within Europe within the tech sector, indicating that they possess these tools and are ready to use them, and that they will protect themselves.

In the context of the significant role that the European market plays for U.S. media corporations, the ACI could be a formidable tool for the E.U. during trade disputes between the Atlantic nations. While President Trump often discusses trade with Europe in terms of physical goods, where Europe has a substantial surplus—the U.S. imported approximately $176 billion more in goods from Europe in 2023 compared to what Europe purchased from the U.S.—the situation is quite different when it comes to services. In fact, Europe showed a deficit of about $118 billion with the U.S. on service-related transactions in 2023, based on data provided by the European Commission.

If trade disruptions occur, American media firms stand to suffer significant losses as they have substantial investments in Europe. According to data from the European Audiovisual Observatory, three major U.S. companies – Netflix, Amazon Prime Video, and Disney+ – collectively account for 85% of viewing time on European streaming platforms (Netflix holds more than half). Furthermore, a large proportion of European box office revenues go to American studio films. Approximately one-quarter of private European TV channels are owned by U.S. corporations, primarily Warner Bros. Discovery, Paramount, and Comcast. For many U.S. media conglomerates, Europe represents their second most significant market, trailing only North America. In 2021, Meta generated nearly a quarter of its total global revenue – $38 billion – from Europe. Netflix earned $12.4 billion in Europe last year compared to $17.4 billion in North America (with the latter figure including smaller markets like the Middle East and Africa).

Johnny Ryan, head of the digital rights group Enforce in Dublin, states that Europe has potent tools, such as legislation, capable of inflicting significant harm on U.S. tech companies if needed. He refers to this as a ‘Damocles’ sword’, suggesting that Europe could always choose to activate it. If they were to do so, it would be like setting off a bomb beneath big tech, with the intention of safeguarding its own democracy.

This tale was initially published in the May 7 edition of The Hollywood Reporter’s magazine. If you’d like to get the magazine, you can do so by clicking here to subscribe.

Read More

2025-05-08 14:54