A month after announcing the US withdrawal from the OECD global tax deal, President Trump issued a memorandum on 21 February 2025 providing for the imposition of tariffs on countries hindering ‘American companies’ global competitiveness’. This initiative specifically targets the US technology sector, which the White House claims is a victim of ‘overseas extortion and unfair fines and penalties’. Austria, Canada, France, Italy, Spain, Turkey and the United Kingdom are singled out for having implemented taxes, fees or regulations on digital services. President Trump not only accuses trading partners of appropriating revenues that should benefit the ‘Nation’s well-being’, but also of ‘violat[ing] American sovereignty’ and ‘compromis[ing] American economic and national security interests’. With this move, the Trump administration is openly seeking to influence foreign legislation, starting with European states. This aggressive stance against the EU and its Member States confirms that transatlantic cooperation in the digital sector is becoming increasingly difficult, highlighting the urgent need for Europe to reduce its dependence on American Big Tech.
EU-US cooperation on digital technologies: widening divides
The memo is the latest in a series of escalating economic measures between the US and the EU. It responds to the European Commission's threat to use its anti-coercion instrument (ACI) against US tech companies, a move sparked by Donald Trump’s coercive use of tariffs, notably his attempt to control Greenland. By providing for the imposition of additional tariffs, the memo signals that not only are digital issues no longer a matter for transatlantic cooperation, they have become a means of leverage in a growing economic war.
Beyond trade, this memorandum underscores the increasingly irreconcilable divergences between the US and the EU.
The presidential statement also claims that ‘foreign legal regimes limit cross-border data flows’, implicitly targeting data localisation measures applying to US cloud providers. But this overlooks the fact that Donald Trump himself likely sealed the fate of the Data Privacy Framework (DPF), the EU-US data transfer agreement signed in July 2023. The day after his inauguration, President Trump ordered several members of the Privacy and Civil Liberties Oversight Board (PCLOB) to resign, rendering the board unable to function. The PCLOB oversees US intelligence and surveillance activities and monitors compliance with the DPF on the US side. By paralysing the PCLOB and undermining its independence, this decision increases the likelihood of the CJEU invalidating this already controversial agreement.
Beyond trade, this memorandum underscores the increasingly irreconcilable divergences between the US and the EU. Turning his opponents’ arguments against them, President Trump advocates, not without irony, for the defence of US ‘sovereignty’ – a term strongly criticised when used by Europeans – and condemns the implementation of protectionist measures and ‘one-sided, anti-competitive policies’. Once again, this overlooks numerous unilateral US laws adopted in recent years that hamper international competition and affect the European market, such as the Inflation Reduction Act, or that threaten European data security, such as the Foreign Intelligence Surveillance Act.
These laws, passed under former US President Biden, show that the EU-US digital rift is nothing new. However, Trump takes a more confrontational stance, labelling foreign regulations as ‘discriminatory’ and ‘disproportionate’. By denouncing any regulation of US Big Tech as a direct attack on the United States, the Trump administration maintains these companies’ oligopoly and forges even closer ties with American tech entrepreneurs. The rise of what Biden described as the ‘tech-industrial complex’ and its proximity to the US political establishment threatens European values and sovereignty. Unhappy with an antitrust fine from the European Commission, Meta CEO Mark Zuckerberg has, for instance, urged the US President to take action against European regulations. He has also criticised content moderation, following X CEO Elon Musk in ending fact-checking and diversity programmes on his platforms. On these issues, tech leaders find strong support among policymakers, notably Vice-President JD Vance, who suggested that US participation in NATO could be reconsidered if the EU restricts free speech on US platforms. US House Judiciary Chair Jim Jordan has also attacked EU regulations, first calling the Digital Services Act (DSA) ‘a global censorship law’ in a letter to EU EVP Henna Virkkunen, then accusing the EU of ‘weaponising the Digital Markets Act (DMA) against American companies’ in an effort to ‘to remedy Europe's economic downturn’ in a letter to EVP Teresa Ribera.
A pivotal moment for the EU’s digital sovereignty
As cooperation with the US in the digital field becomes increasingly strained, it is more urgent than ever for the EU to strengthen its ‘digital sovereignty’ and stand up to its ally. This implies three actions.
First, it is important the EU does not yield to US pressure. In particular, the EU must stand firm against attempts to weaken the DSA, the DMA and the AI Act, or any other measure aimed at building a secure and inclusive digital environment. Here, the European Commission's withdrawal of the EU Artificial Intelligence Liability Directive (AILD), following the Paris AI summit and JD Vance’s refusal to sign the joint statement on AI, raises concerns. While aimed at reducing regulatory burdens, it also risks causing legal uncertainty detrimental to European start-ups and SMEs.
A solid European industrial ecosystem is crucial to prevent external coercion.
Second, the EU must strengthen its digital industrial capabilities – a leitmotif of European digital policies. It should focus on building robust infrastructures, developing back-end technologies, and facilitating European companies' access to the regional market so they can scale up effectively and remain competitive. In this regard, the EU’s €200 billion AI investment is a step in the right direction. A solid European industrial ecosystem is crucial to prevent external coercion.
Third, the EU needs to continue diversifying its external partnerships and overcome its internal divisions. Strengthening cooperation with a diverse range of partners is essential to avoid excessive dependency on an increasingly adversarial counterpart ready to conflate NATO-related issues and international security with tax and regulatory disputes. Although some European politicians echo US rhetoric, Member States need to build on common objectives, understanding that a united front is always more effective in protecting their interests.
President Trump’s memorandum shows little regard for Europe, ignoring that in the global tech race, the US needs EU cooperation. Amid geopolitical instability and heightened economic competition, the EU can no longer afford to scatter its resources trying to appease an ally that prioritises its own interests at the expense of European states. It should instead concentrate its efforts on strengthening its resilience and autonomy in the digital sector.
