President Donald Trump and the European Union may have struck a trade deal, but tensions between them over technology regulation persist. Trump offered European leaders a painful reminder of that early Tuesday.
As Europe slept, the American president threatened tariffs and restrictions on countries seen as unfairly regulating US tech firms.
"Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology," he posted on Truth Social, opening a new and potentially contentious chapter in the world's continuing trade fight.
The post does not call out the European Union specifically, but Trump and other key administration officials have made it clear for months that they are unhappy with how the 27-nation bloc treats big American technology companies including X and Meta.
Republicans including vice president JD Vance have criticised an EU law, the Digital Services Act, that requires social media companies to more aggressively police their platforms for illegal content and disinformation. Vance and other officials argue the law places an unfair burden on American platforms and undercuts free speech.
This month, secretary of State Marco Rubio instructed US diplomats to lobby against the rules. And on Monday, Reuters reported the administration was contemplating sanctions against EU officials who were responsible for enacting the key digital regulation.
The social media rules are not the only European technology policy that has provoked the Trump administration. US officials and technology companies have also been critical of the Digital Markets Act, which is meant to prevent large technology platforms from abusing the power that their size gives them. And some European nations have digital services taxes.
The question is whether the European Union will be able to remain unbending when it comes to technology regulation.
Trump's outburst comes at a sensitive moment in America's relationship with the European Union. The two trading partners just last week published the text of a trade deal that they had been working to complete.
The agreement would apply 15% across-the-board tariffs on most EU exports to the United States, which will be costly for producers across the Continent. But it did not seriously weaken digital regulation, which Europeans had greeted as a major victory.
But the deal is not final. The text itself is not legally binding, and even once the agreement is put in place, officials have indicated that it is only a first step. Both sides could bring forward additional asks.
Europeans have suggested that they plan to continue pushing for exemptions for products such as wine and spirits. And it is becoming increasingly clear that Americans will continue pushing for a loosening of technology rules.
"All it takes is a single tweet from Trump to suggest that the joint statement isn't worth the paper it's written on," said Mujtaba Rahman, managing director for Europe at the Eurasia Group, a research consultancy. "Both countries and the EU-level are at risk."
Around the world, tech firms have faced scrutiny for not doing enough to stop the spread of disinformation, engaging in anticompetitive business practices and not paying their fair share of taxes in the countries where they operate.
Trump's threat shows his close ties to the US tech industry and willingness to defend its interests abroad. Over the past several years, Australia, Brazil, Britain, Canada, the European Union and others have proposed or adopted laws, regulations and tax policies focused on the tech sector.
The trade measures the president is warning of could be painful for the European Union. Restrictions on computer chip exports, for instance, would harm efforts in Europe and elsewhere to build massive data centers for developing the technology.
Asked about Trump's post at a news conference Tuesday, Paula Pinho, an EU spokesperson, declined to comment in detail on hypothetical measures. But Thomas Regnier, an EU spokesperson, pointed out that the bloc's digital regulations did not specifically target American companies, but applied to firms from all over the world.
The stakes are high for Europe. Officials here have long made it clear that they see their regulations as a matter of national sovereignty. Given that, bending to Trump would amount to allowing the United States to write Europe's rules.
But EU officials have already made major concessions to appease Trump, accepting higher tariffs on key exports ranging from cars to medicine while promising to make major investment in American technology and energy. The trade deal has been widely greeted as a capitulation on Europe's part.
The bloc did not have much of a choice, however.
Although its member states are moving rapidly to increase their own defense outlays and to diversify their customer base away from the United States, the bloc is for now both militarily and economically closely intertwined with America.
Given that, Europe's leaders have been left trying to appease Trump.
Trump on Monday underscored the tone of recent deliberations, claiming to reporters that "they call me the president of Europe."
Source Name : Economic Times