U.S. Trade Representative Jameison Greer and Commerce Secretary Howard Lutnick traveled to Brussels recently to meet with their counterparts to finalize the trade deal framework announced over the summer.
While the outline of the deal remains promising, our European allies are thinly masking their latest attempt to target U.S. companies with regulatory complexity in hopes of skirting the spirit and possibly letter of the draft agreement. Lutnick rightfully made clear the Europeans’ digital regulatory regime would need to be rebalanced before any other progress could be made.
This confrontation was needed. At a recent European Digital Sovereignty Summit in Berlin, leaders from the European Union and its member countries gathered under the auspices of showcasing unwavering European resolve in pursuit of “greater European digital sovereignty.” But beneath the surface lies their latest tactic aimed less at fairness and innovation than at targeting U.S. tech firms.
The EU’s recent actions, including the launch of investigations under the Digital Markets Act specifically targeting American firms, follow a clear pattern. Regulation is being wielded not as a neutral policy tool meant to foster competition but as a weapon that hands non-U.S. firms an unfair advantage by placing obstacles in front of their American counterparts.
Europe claims it wants to reduce reliance on foreign tech, including dependencies on Chinese state-backed companies. But the regulations and arguments about data sovereignty are designed to mask a clear protectionist agenda directed against U.S. businesses. The real goal is to kneecap American companies that have outperformed European rivals purely on technological and commercial merits.
The summit’s messaging about pooling Europe’s forces to reduce dependencies and boost resilience is not a call for greater European innovation, but a plan to stymie competition from U.S. firms through regulatory barriers.
If Europe were sincere about establishing a secure and balanced digital ecosystem, then the DMA investigations announced last week would not have focused solely on U.S. cloud providers and would have targeted Chinese companies alongside them. In fact, the European Commission even acknowledges that Microsoft and Amazon, the companies targeted in its latest investigation, don’t meet the requirements under the DMA to be automatically designated as gatekeepers. It’s a bait and switch.
Europe has been using the strategy for years, and its justifications don’t add up.
Indeed, last week’s announcements follow in the footsteps of the General Data Protection Regulation, which, under the guise of privacy and data protection, created an enormous compliance burden for U.S. companies but simultaneously gave European firms a competitive edge. The regulation has since been widely endorsed by European tech companies for that very reason. Had previous U.S. administrations taken a stronger stand against these far-reaching regulations, American businesses might have been spared years of costly adjustments and diminished market share overseas.
The glaring gap in infrastructure market share between the United States and Europe also belies any claim that these policies are about citizen protection and security. America does not dominate Europe’s critical infrastructure. If anything, the U.S. depends heavily on European providers.
European giants Ericsson and Nokia together control close to 65% of the U.S. wireless network vendor market, a greater share than that held by American cloud providers in Europe. Ericsson alone controls 40% of U.S. wireless equipment, with major contracts covering 70% of AT&T’s wireless traffic and substantial partnerships with Verizon. Nokia has acquired former U.S. companies and tied itself closely to American giants such as AT&T, and leveraged regulations such as Build America, Buy America to solidify its foothold.
While European companies enjoy open access to U.S. markets, Europe is introducing investment screening measures that subject American firms to far more scrutiny than their Chinese counterparts. This uneven enforcement undermines Europeans’ pretense about fair competition and security, exposing political motives masquerading as regulatory oversight.
The Trump administration’s call for fairness and reciprocity in international economics is vital. Rather than yielding to these European regulatory maneuvers, the U.S. should assertively protect its technology companies and demand a level playing field. The history of GDPR and the patterns emerging from the Digital Sovereignty Summit reveal Europe’s broader scheme, which is to use regulation not to promote innovation or security, but to erect artificial barriers targeting American tech firms.
The U.S. must respond firmly and use every available tool to combat Europe’s regulatory protectionism, preserve American innovation, and ensure a truly level international playing field.
Josh Hodges is a commissioner on the U.S.-China Economic and Security Review Commission, former national security adviser to House Speaker Mike Johnson, and former special assistant to the president at the National Security Council.