Over the past year, the Chinese Communist Party has engaged in repeated clashes with the United States and other nations of the free world. Yet, it continues to weave its surveillance technologies into the very countries it targets for attack.
Beijing has run drills to prepare to invade Taiwan, clashed with the Philippines around Scarborough Shoal, and targeted Japanese planes. China’s consul general in Osaka even threatened to behead Japanese Prime Minister Sanae Takaichi. Chinese leaders rolled out export controls to choke off global supplies of rare earth magnets, and Beijing has dumped massive trade surpluses on Europe, leading to a CCP-EU trade confrontation. Even Panama has come under coercion for rejecting Chinese control of its ports.
Despite Beijing’s endless geopolitical provocations, the CCP enjoys a foothold inside the Western world’s critical digital infrastructure. This creates a paradox for Western countries. Free nations cannot run on technologies designed for a totalitarian system. The only solution to this paradox is to reject Beijing’s technologies and the global ambitions they underwrite.
Beijing seeks to aggregate geopolitical power by controlling the infrastructure through which modern life operates, including global communications, cloud computing, financial tech supporting digital commerce, and artificial intelligence. Yet, much of the West, including America’s most important military allies, is effectively voting for a totalitarian future by punishing American technologies while preferring CCP technologies.
For the better part of the last decade, European governments have devoted enormous political and regulatory energy toward weakening successful American telecom, cloud, and tech firms in the name of “digital sovereignty.”
Through the Digital Markets Act, Digital Services Act, digital taxes, antitrust investigations, speech regulations, and restrictions on data flows and cloud infrastructure, Europe has constructed a regulatory regime aimed overwhelmingly at American firms. Some European officials now openly boast that U.S. firms “feeling the pain” proves the policies are working.
This posture, they claim, is to secure European “sovereignty.” In reality, it has produced greater dependence on Chinese infrastructure.
Indeed, as American firms are litigated against, regulated into paralysis, or politically weakened, Chinese state-backed companies have steadily expanded their foothold inside Europe’s telecommunications and cloud systems. Even as American states increasingly block Chinese tech from critical infrastructure, entire national 5G systems across Europe rely heavily on Chinese components.
Deutsche Telekom, the German telecom giant that controls T-Mobile here in the United States, perhaps best embodies this paradox. It has continued using Huawei equipment throughout large portions of its European networks even after years of Western intelligence warnings surrounding Huawei’s ties to the CCP. Meanwhile, it pushes to punish American technologies in Europe while lobbying for greater access in the U.S.
Now, European regulators are insisting that advanced AI inference “will have to exist within European borders,” not because of any operational necessity but as part of Europe’s broader push for sovereign AI. This will curtail American AI innovation and potentially operation inside Europe. Europe’s definition of AI “sovereignty” might well remain flexible enough to accommodate Chinese firms eager to fill the vacuum.
This dangerous paradox has migrated to our own hemisphere. European officials have increasingly encouraged countries such as Brazil, Chile, and Colombia to adopt EU-style digital regulations of their own. As a result, some of America’s closest trading partners are now imposing or considering digital services taxes, innovation-killing AI legislation, and restrictive data rules designed to punish U.S. digital and telecom providers.
Brazil is perhaps the clearest example. Beyond the restrictions it has already imposed on U.S. tech companies, the Brazilian government is now advancing a competition bill modeled on Europe’s Digital Markets Act, alongside AI rules that would place some of the world’s heaviest regulatory burdens on American firms. Brazil also remains the lone holdout against extending the WTO’s long-standing agreement not to impose tariffs on digital products and online services, despite the fact that such tariffs would disproportionately affect American tech companies.
All the while, Chinese companies continue expanding their role inside the country’s digital infrastructure. Huawei reportedly now controls nearly half of Brazil’s 5G architecture and has embedded itself throughout fiber networks, cloud services, and data centers. ByteDance, TikTok’s Chinese parent company, is preparing similar investments that would make Brazil a “pillar” of its Western Hemisphere operations.
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The longer this continues, the harder it will become to unwind Chinese interests from critical global systems, and the greater the leverage the CCP will hold over modern infrastructure and the Western world it ceaselessly attacks. Beijing intends to control the systems through which data, communications, cloud computing, and artificial intelligence flow and then to wield enormous leverage in the decades ahead.
Europe and Latin American countries treat these systems as mere commercial markets to regulate, fine, litigate, and politicize. American leaders must continue to reinforce the geopolitical reality: nations that opt for totalitarian technologies are ushering in a future that will become a nightmare. Washington should firmly remind them of this fact and adjust alliance benefits and terms of trade accordingly.
Michael Lucci is Founder and CEO of State Armor.