The European Union is unlikely to soften its stance on digital regulations despite fresh tariff threats from U.S. President Donald Trump, according to Varg Folkman, a policy analyst at the European Policy Center on Saturday.
The remarks come as Trump escalates his criticism of European digital rules, threatening punitive tariffs, restrictions on semiconductor exports, and other retaliatory measures.
For years, the European Union has advanced a series of digital regulatory measures, including the Digital Services Act and Digital Markets Act, aimed at ensuring online safety, curbing the dominance of tech giants, and safeguarding Europe’s “digital sovereignty.” Several member states, including France, Italy, and Spain, have also imposed digital services taxes on multinational technology firms.
The U.S. accuses the EU of "overregulation" that restricts free expression and unfairly targets American companies.
"They do not like the EU imposing fines in general through, for instance, the Digital Markets Act. American companies have been fined there for not complying with the law. And in the EU's view, these are just fines for breaking the law. But in the U.S. sense, they are terming these tariffs or taxes by the EU [as] unduly imposed on American companies," said Folkman.
The long-standing regulatory disputes between the U.S. and the EU over the digital rules has become worse since Trump's return to the White House. His recent threats to impose tariffs and restrict semiconductor exports in retaliation for EU digital rules are feared to once again trigger tariff frictions between the two and may even invalid the recently reached European and the U.S. trade agreement.
"If the U.S. and the EU started posing tariffs on each other due to digital regulations and conflict there, then that would probably make the deal pretty irrelevant because it would be outside of the sort of agreed terms in the deal," said Folkman.
In addition to imposing higher tariffs on EU goods, the U.S. may also resort to measures such as restricting chip exports and imposing diplomatic sanctions against the European Union over technology regulation issues. This move could not only impact numerous industries in Europe but also further widen the rift between the two sides.
"Now, they sort of compromised with Trump once for the trade deal that was very unbalanced in the U.S.' favor. If they don't like to compromise on the digital rules as well, which are EU passed laws, it's not something that the commission can just revoke on their own, then I think that it's going to be a very tough sell to the European Parliament, European politicians in general, the European public, so I find it unlikely that we're going to compromise here," he added.
EU unlikely to back down on digital rules despite US tariff threat: analyst
