The Trump administration is lashing out at foreign laws aimed at clamping down on online platforms that have gained outsized influence on people’s attention — while trying to avoid launching new trade wars that could threaten the U.S. economy. Over the past month, U.S. officials have paused talks on a tech pact with the United Kingdom, canceled a trade meeting with South Korean officials and issued veiled threats at European companies over policies they believe unfairly penalize U.S. tech giants. Several tech policy professionals and people close to the White House say the recent actions amount to a “negotiating tactic,” in the words of one former U.S. trade official. As talks continue with London, Brussels and Seoul, the Office of the U.S. Trade Representative is pressing partners to roll back digital taxes on large online platforms and rules aimed at boosting online privacy protections — measures U.S. officials argue disproportionately target America’s tech behemoths. “It’s telegraphing that we’ve looked at this deeply, we think there’s a problem, we’re looking at tools to address it and we’re looking at remedies if we don’t come to an agreement,” said Everett Eissenstat, who served as the director of the National Economic Council in Trump’s first term. “It’s not an unprecedented move, but naming companies like that and telegraphing that we have targets, we have tools, is definitely meaningful.” But so far, the administration has shied away from new tariffs or other aggressive actions that could upend tentative trade agreements or upset financial markets. And the new tough talk may not be enough to placate some American tech companies, who are pressing for action. One possible action, floated by U.S. Trade Representative Jamieson Greer, would be launching investigations into unfair digital trade practices, which would allow the administration to take action against countries that impose digital regulations on U.S. companies. “I would just say that’s the next level of escalation. I think that’s what people are waiting for and looking for,” said a representative from a major tech company, granted anonymity to speak candidly and discuss industry expectations. “What folks are looking for is like action over the tweets, which, we love the tweets. Everyone loves the tweets.” Trump used similar investigations to justify raising tariffs on hundreds of Chinese imports in his first term. But those investigations take time, and it can be years before any increases would go into effect. Greer has also been careful to hedge threats of new trade probes, stressing they are not meant to spiral into a broader conflict. Speaking on CNBC’s “Squawk Box” last week, he floated launching a trade investigation into the EU’s digital policies, but said the goal would be a “negotiated outcome,” not an automatic path to higher tariffs. “I don’t think we’re in a world where we want to have some renewed trade fight or something with the EU — that’s not what we’re talking about,” Greer said. “We want to finish off our deal and implement it,” he continued, referring to the trade pact the partners struck over the summer. Greer also raised the prospect of a trade probe in private talks with South Korea earlier this fall, saying the U.S. might have to resort to such action if the country continues to pursue legislation the administration views as harmful to U.S. tech firms. But a White House official clarified that the U.S. was not yet considering such a “heavy-handed approach.” Even industry officials aren’t certain how aggressive they want the Trump administration to be, acknowledging that if the U.S. escalated its fight with the EU over their tech regulations, it could spark a digital trade war that would ultimately end up harming all of the companies involved, according to a former USTR official, granted anonymity to speak candidly. President Donald Trump has long criticized the tech regulations — pioneered by the European Union and now proliferating around the globe. But he’s made the issue a much more central part of his second-term trade agenda, with mixed results. While Trump’s threat to cut off trade talks with Canada got Prime Minister Mark Carney to rescind their three percent tax on revenue earned by large online platforms, his administration has struggled to make headway with the EU, UK and South Korea in the broader trade negotiations over tariffs. The tentative trade deal the administration reached with the EU over the summer included a commitment from the bloc to address “unjustified digital trade barriers” and a pledge not to impose network usage fees, but left the scope and direction of future discussions largely undefined. The agreement fleshed out with South Korea this fall appeared to go even further, spelling out commitments that regulations governing online platforms and cross-border data flows won’t disadvantage American companies. But none of those governments have so far caved to U.S. pressure to abandon their digital regulations entirely, and the canceled talks and threatening social media posts are a sign of Trump’s growing frustration. “You won’t be surprised to know that what we think is fair treatment and what they think is fair treatment is quite different and I’ve been quite frankly disappointed over the past few months to see zero moderation by the EU,” Greer said Dec. 10 at an event at the Atlantic Council. Last week, Greer’s office amped up the rhetoric further, threatening to take action against major European companies like Spotify, German automation company Siemens and Mistral AI, the French artificial intelligence firm, if the EU doesn’t back off enforcement of its digital rules. The threat came a week after the EU fined X, the company formerly known as Twitter, $140 million for failing to meet EU transparency rules. Greer’s office also canceled a meeting planned for last Thursday with South Korean officials, as South Korean lawmakers introduced new digital legislation and held an explosive hearing on a data breach at Coupang, an American-headquartered e-commerce company whose largest market is in South Korea. The South Korean Embassy denied any relationship between the Coupang hearing and the cancellation of the recent meeting. “Neither Coupang’s data breach, the subsequent investigation by the Korean government, nor the National Assembly’s hearing played a role in the scheduling of the KORUS Joint Committee,” said an embassy official. The canceled meetings and frozen talks are significant — delaying implementation of bare bones trade agreements and investment pledges inked in recent months. But the Trump administration has shown little interest in blowing up the deals its reached and reapplying the steep tariffs it threatened over the summer, which could trigger significant retaliation and, as concerns about affordability and inflation continue to simmer in the U.S., prove politically dicey. Launching trade investigations at USTR or fining specific foreign companies could be a less inflammatory move. “What is happening is that these issues are starting to come to a head,” said Dirk Auer, a Director of Competition Policy International Center for Law & Economics, who focuses on antitrust issues and recently testified before Congress on digital services laws. “At some point the administration has to put up or shut up. They need to put their money where their mouth is. And I think that’s what’s happening right now.” Gabby Miller contributed to this report.

Ireland’s Data Protection Commission (DPC) has launched a fresh inquiry into TikTok’s transfers of personal data to Chinese servers, it said Thursday, following on from its investigation that led to a €530 million fine against the company in April. The Irish regulator in April was informed by TikTok of an issue that meant a limited amount of EU user data had been stored on servers in China, an issue it said it discovered in February. The discovery contradicted the firm’s long-held position that personal data of EU users was only accessed remotely by the platform’s staff in China. But it came only just before the investigation concluded. Because of this, the DPC did not investigate it fully. The regulator in April fined TikTok for not sufficiently protecting EU personal data from Chinese state surveillance. The DPC earlier this year expressed “deep concern” that TikTok submitted “inaccurate information to the inquiry.” In a statement on Thursday, it said it had decided to open a new inquiry into the personal data transfers to servers in China after consulting with other data protection authorities in Europe. The Irish regulator said the inquiry will focus on whether TikTok has complied with its obligations under the EU’s General Data Protection Regulation, including articles relating to accountability, transparency, cooperation with supervisory authorities and compliance with rules around data transfers outside of the EU. TikTok was notified earlier this week about the Irish DPC’s decision to launch a fresh inquiry. The company has been contacted for comment.

WhatsApp plans to roll out a new advertising model in the coming months, but the company has told Ireland’s privacy regulator that it won’t affect the EU until next year. WhatsApp owner Meta announced the launch of new features in WhatsApp’s “Updates” tab on Monday, including targeted advertisements and a subscription model. It said the features would start to appear for users “over the next several months.” The announcement immediately raised concern among privacy organizations, in particular the fact that Meta will also use “ad preferences and info” from across people’s Facebook and Instagram accounts, where they are linked to WhatsApp. Speaking to reporters on Thursday, the Irish Data Protection Commission, responsible for enforcing the EU’s General Data Protection Regulation against Meta, said that it has been informed by WhatsApp that its advertising model won’t roll out in the EU until 2026. “That new product won’t be launching [in] the EU market until 2026. We have been informed by WhatsApp and we will be meeting with them to discuss any issues further,” said Commissioner Des Hogan. He added that the advertising model will be discussed with other data protection authorities “so that we can reflect back any concerns which we have as European regulators.” A spokesperson for WhatsApp confirmed that the advertising model is a “global update, and it is being rolled out gradually around the world.” Meta said in the announcement that the new features are built “in the most privacy-oriented way possible,” and has emphasized that sharing of data between WhatsApp, Instagram and Facebook will only happen when users have opted in to having their accounts linked. The U.S. social media giant previously paused the rollout of flagship artificial intelligence technology in the EU over privacy concerns from the Irish regulator. Commissioner Dale Sunderland said that regarding WhatsApp’s advertising model, they “haven’t had that sort of conversation” with the company. “We’re still early days, we’ll engage as we do with every other new feature, new issue that they bring to us … and at this stage, it’s too early to say what, if any, will be any red line issues,” he said.

BRUSSELS — The European Union’s most iconic tech law was long thought to be untouchable. Those days are over. The EU executive on Wednesday will present its plan to amend the General Data Protection Regulation, GDPR for short, to ease reporting requirements for small and cash-strapped businesses. That same evening, EU officials are negotiating the final details of a separate law that’s meant to fix some of what’s seen as the GDPR’s original design flaws. It’s the latest law to fall victim to the European Commission’s drive to slash red tape and “simplify” EU legislation for the benefit of businesses and growth. The EU’s landmark economic report by former Italian Prime Minister Mario Draghi warned in September that Europe’s complex laws were preventing its economy from keeping up with the United States and China. Draghi singled out the GDPR in particular as hampering innovation. Digital rights groups and EU insiders often praise the GDPR for setting the global standard for the protection of privacy. For many businesses, though, it is seen as a symbol of costly, burdensome EU rules. But changing the GDPR threatens to topple a delicate balance between privacy activists and business lobbies in Brussels. Mario Draghi singled out the GDPR in particular as one of the laws hampering innovation. | Teresa Suarez/EFE via EPA Negotiations on the GDPR from 2012 to 2016 triggered one of the biggest lobbying efforts Brussels has ever seen. Since it took effect in 2018, the EU has steered clear of amending it, fearing it would reignite the vicious lobbying war. The Commission has preempted some of those worries, saying its simplification proposals will be limited to easing reporting requirements and won’t touch the underlying principles of the GDPR.   A review of the law last summer showed “the need for greater support [for] businesses, especially SMEs, in their compliance efforts,” Justice Commissioner Michael McGrath said.   Emails seen by POLITICO earlier this month showed the proposal is expected to extend reporting exemptions currently reserved for SMEs (with fewer than 250 employees) to mid-cap companies (with fewer than 500 employees). It would also create more exemptions for these smaller businesses, freeing them from keeping records or preparing privacy impact assessments. On Wednesday evening, negotiators will head into final crunch talks to agree on extra rules to speed up GDPR investigation procedures. The new rules aim to spur sluggish cross-border data protection probes, which can drag on for years and often involve Big Tech companies. The goal is to set clearer ground rules for how national data protection regulators work together, clarify the rights of complainants and those being investigated during the process, and, crucially, set concrete deadlines for investigations.  According to four people familiar with the negotiations, most of the text has already been agreed, and the main things left to be hammered out on Wednesday evening are the length of deadlines and judicial remedies.   The EU is unlikely to stop there in its efforts to trim its famed privacy law. When consulting companies and experts about Wednesday’s proposal, the Commission said there could be “possible future reflection on the application of the GDPR.” In a separate consultation about an upcoming Data Union Strategy, it also name-checked the GDPR as one law on the table for possible “consolidation.”  And countries have asked the EU executive to clarify how the new Artificial Intelligence Act interacts with the GDPR, according to a document obtained by POLITICO. Pieter Haeck contributed reporting.

EU privacy regulators have for the first time taken aim at Beijing’s sweeping surveillance laws in a ruling that threatens to cut off data pipelines with China to protect Europeans.  Ireland’s powerful privacy regulator slapped TikTok with a €530 million fine on Friday, ruling it illegally sent data to China and couldn’t guarantee this was safe from government snooping. The decision is a watershed moment for Europe’s relationship with Beijing when it comes to the bloc’s flagship data privacy rules and has significant implications for any company transferring personal data from the EU to China. Friday’s ruling means the “screw is turning” on data flows to China, said Joe Jones, research director at the International Association of Privacy Professionals, which represents people working in the world of privacy globally. “We’ve had over a decade of EU-U.K., EU-U.S. fights and sagas on [data flows]. This is the first time we’ve seen anything significant on any other country outside of that transatlantic triangle — and it’s China,” said Jones. Most high-level enforcement of the EU’s General Data Protection Regulation (GDPR) has so far targeted American tech giants, as Europe and the United States have bickered over legal protections for personal data sent across the Atlantic.  Chinese surveillance and data privacy breaches remained out of the EU’s crosshairs but the growth in popularity and EU presence of big Chinese players has now cast a spotlight on Beijing’s techno-authoritarian tendencies.  Earlier this year, six Chinese companies (AliExpress, SHEIN, Temu, WeChat and Xiaomi as well as TikTok) were the target of complaints filed with European data protection authorities by Austrian privacy group Noyb, founded by privacy activist Max Schrems.  The third-largest fine ever for a breach of the EU’s data protection rulebook, Friday’s decision by Ireland’s Data Protection Commission highlights that China’s laws are fundamentally at odds with European data protection principles. The fact that the Irish decision was backed by all European data protection authorities with no objections is “pretty significant,” Jones said. “I expect the question of where data can flow, and how, will quickly become part of the conversation on competitiveness.” TikTok, in its response, said the ruling “risks setting a precedent with far-reaching consequences for companies and entire industries across Europe that operate on a global scale,” and “delivers a blow to the European Union’s competitiveness.” The decision is a watershed moment for Europe’s relationship with Beijing when it comes to the bloc’s flagship data privacy rules and has significant implications for any company transferring personal data from the EU to China. | Erik S. Lesser/EFE via EPA The ruling, and especially the fact that TikTok had been storing a limited amount of European user data on Chinese servers, is also likely to prick the ears of U.S. authorities which are trying to force a sale of TikTok from Chinese parent ByteDance to a U.S. owner. The U.S. has similar concerns over how Chinese authorities can access Americans’ data. TikTok has repeatedly insisted it does not store U.S. data in China. THE €530 MILLION QUESTION TikTok has been working for years to stave off a heavy fine. Companies sending EU data to China don’t have an overarching legal framework for this as they would for territories such as the U.S. — instead they rely on individual contracts, through which China-based companies receiving EU data pledge to follow EU protections.  Two years after the Irish investigation was launched, TikTok also unveiled a €12 billion plan called Project Clover to assuage EU concerns over Chinese surveillance through the app. This centered around keeping European users’ data on servers in Europe and allowing a European security company far-reaching access to audit cybersecurity and data protection controls. Just this week, TikTok confirmed a €1 billion investment in a new data center in Finland.  The question now being asked by TikTok and other European businesses sending data to China is: If specific contracts and locating data servers in the EU is not enough to please regulators, then what is?   TikTok said on Friday it was “disappointed to have been singled out” despite it relying on the “same legal mechanism employed by thousands of other companies providing services in Europe.” “If the extensive measures implemented under Project Clover … as well as independent, third-party monitoring are deemed insufficient, it’s reasonable to ask: what would be considered sufficient?” said Christine Grahn, TikTok’s head of public policy and government relations for Europe. TikTok now has six months to find a way to make its data transfers to China compliant with the GDPR or shut off the flow of EU data to China entirely.   The company has said it plans to challenge the decision, which will delay the six-month ultimatum. But any business taking a similar legal approach to TikTok will now be in the dark about how it can legally send data to China. ‘GREY ZONE’ Chinese laws like the Anti-Terrorism Law, the Counter-Espionage Law, the Cybersecurity Law and the National Intelligence Law give the government sweeping powers to order Chinese companies to hand over data. Tim Rühlig, senior analyst for Asia and Global China at the European Union Institute for Security Studies said that there is currently a legal “gray zone” in terms of how those surveillance laws apply to data stored outside of China. “It’s a one-size-fits-all clause that says organizations [and] natural persons of China have to comply with security services when asked something. I have a hard time seeing a Chinese company saying, ‘Sorry that that piece of data that you’re asking for lies on a European server,’” he said. Rogier Creemers, lecturer in Modern Chinese Studies at Leiden University, said it was “notoriously difficult to monitor” how often Chinese authorities actually use these powers, but the risk that EU citizen data will be snooped on is “not zero.”  Although the Irish regulator’s decision is specifically related to TikTok’s data handling practices, Creemers said that other companies sending data to China will “definitely reassess their own compliance strategies with the GDPR, and whether those compliance strategies will need to be revised.”

TikTok has to pay €530 million in penalties because it sent the personal data of Europeans to China illegally and wasn’t transparent enough with users, Ireland’s powerful privacy regulator said Friday. The Irish Data Protection Commission (DPC) said TikTok breached the EU’s flagship data protection rules when it sent European user data to China because it couldn’t guarantee that the data was protected under China’s surveillance laws. Taking a stance on data transfers to China for the first time, the regulator said TikTok failed to adequately assess the implications of Chinese surveillance laws on Europeans’ data. Those laws — which give the Chinese government sweeping powers to order companies to hand over data — “materially diverge from EU standards,” TikTok acknowledged during the inquiry. The regulator also said TikTok breached transparency rules between 2020 and 2022 because it didn’t tell users that personal data was being transferred to China. It noted that TikTok updated its privacy policy in 2022 and is now “compliant.” The company has been fined €485 million for its data transfers to China and €45 million for the lack of transparency in its privacy policy. The fine is the third-largest ever for a breach of the EU’s General Data Protection Regulation. TikTok has its EU headquarters in Ireland, meaning the Irish DPC is the lead authority in charge of enforcing the EU rules. TikTok had for years claimed it did not store European or American user data on servers in China, but in April informed the regulator that it had discovered in February that “limited EEA User Data” had in fact been stored in China. Irish DPC Deputy Commissioner Graham Doyle said the regulator was taking this discovery “very seriously,” and while TikTok has said it deleted the data on Chinese servers, was considering “what further regulatory action may be warranted.” TikTok has been given six months to bring its data processing practices in line with the EU’s privacy rules, or suspend all data transfers to the country. TikTok said it “strongly contest[s]” the Irish DPC’s findings and plans to appeal in full. “Beyond the DPC’s failure to substantively consider the extensive safeguards [already implemented by Tiktok], we are disappointed to have been singled out despite relying on the same legal mechanism employed by thousands of other companies providing services in Europe,” said Christine Grahn, TikTok’s head of public policy and government relations for Europe, in a written statement. TikTok pointed to its €12 billion investment in Project Clover, which is rolling out data centers in Europe to store data locally in the EU, as well as other privacy safeguards. The Irish DPC acknowledged the project but said it was not enough to sway its decision. Grahn emphasized that TikTok has “never received a request for European user data from the Chinese authorities, and has never provided European user data to them.” She said that the Irish DPC ruling “risks setting a precedent with far-reaching consequences for companies and entire industries across Europe that operate on a global scale,” and “delivers a blow to the European Union’s competitiveness.”

Ireland’s privacy regulator launched an investigation on Friday into how social media platform X has used Europeans’ personal data to train its artificial intelligence model Grok. The move to target the platform owned by Elon Musk, tech billionaire and right-hand man to United States President Donald Trump, is likely to stoke further tensions between the EU and U.S. over Europe’s tech rules and regulations. The probe by Ireland’s Data Protection Commission (DPC) looks into how personal data “in publicly-accessible posts” on X were processed to train Grok, the regulator said in a statement on Friday. Musk’s AI startup xAI has been developing a group of AI models under the name Grok, which are used to power things like the AI chatbot available on the X platform. Grok’s gobbling of EU data was already the subject of scrutiny from the Irish regulator last year, when X — after a battle in the Irish courts — agreed to suspend the use of EU citizens’ data to train its AI models. The Irish regulator said on Friday that its new investigation will examine whether X has been complying with the EU’s General Data Protection Regulation (GDPR), including whether data was processed lawfully and according to transparency rules. X did not immediately respond to a request for comment.

BRUSSELS — The European Commission and South Korea agreed a digital trade deal on Monday that will slot into their existing free-trade agreement, with EU trade chief Maroš Šefčovič calling it “nothing short of a major milestone.” The deal amounts to a vote of confidence from Seoul in how the EU regulates tech and e-commerce, and comes as U.S. President Donald Trump appears likely to launch a trade war on Brussels. One target that Trump’s political allies and U.S. Big Tech have in their sights is the bloc’s digital rulebook, which they view as an unfair market barrier. “Politically, it’s an important signal,” a Commission source said ahead of the announcement, referring to the EU’s push to diversify its foreign trade as the $1.7 trillion transatlantic commercial relationship with America deteriorates. “There might be more like-minded countries for the EU to work with than you would have thought,” added the source, who was granted anonymity to speak freely. The EU has racked up accords in recent months, including with the Mercosur bloc of South American countries and with Mexico — and wants to do a free-trade deal with India this year. Šefčovič announced the agreement in Brussels after meeting with Korean Trade Minister Cheong In-kyo. In comments to reporters, he emphasized the importance of the digital deal as efforts to head off a transatlantic trade escalation stall. Although the European Union’s “doors are open,” the United States “does not seem to be engaging to make a deal” to avoid a tariff war ahead of the planned reimposition of U.S. tariffs on steel and aluminum on Wednesday. “We jointly identified the few areas that would allow us to move forward by fostering a mutual benefit. But in the end, one hand cannot clap,” Šefčovič said. The trade commissioner also placed a call with his Thai counterpart on Monday, ahead of a round of negotiations on a trade deal later this month. And he namechecked ongoing talks with Indonesia, Malaysia, the Philippines and partners in the Middle East to deepen commercial ties. DIGITAL DEALINGS Digital trade deals cover data flows, security around personal data, and business-enabling technologies such as digital contracts. In the Commission’s words, the Korean deal will “build consumer trust; ensure predictability and legal certainty for businesses, as well as trusted data flows; while removing and preventing the emergence of unjustified barriers to digital trade.” President Yoon Suk-yeol was impeached in December and arrested in January after controversially declaring martial law last year. | Chung Sung-Jun/Getty Images It’s significant in light of the political crisis in South Korea. President Yoon Suk-yeol was impeached in December and arrested in January after controversially declaring martial law last year. Yoon awaits judgment after a court completed hearings last month. Prime Minister Han Duck-soo, who was seen as attempting to obstruct Yoon’s impeachment, was impeached himself, leaving Finance Minister Choi Sang-mok in charge of the presidency and the prime minister’s office. Šefčovič and Cheong met in Brussels on Monday for the annual EU-Korea Trade Committee that oversees implementation of the broader trade agreement, which dates back to 2011. The two sides began discussing the deal in the fall of 2023, right after the EU announced it had reached such an agreement with Japan. Digital issues were not included in the trade negotiations with Japan and Korea because the EU at the time was working on its landmark GDPR privacy legislation. Šefčovič also said the EU wants to close a similar deal with Singapore in the next few months. The EU has already made similar data rules part of agreements with trade partners such as New Zealand and the U.K. This story has been updated.

BRUSSELS — German Chancellor Olaf Scholz says the European Union would be ready to retaliate if Donald Trump imposes tariffs “within an hour.” Not so fast.  The U.S. president this week reinstated duties on steel and aluminum that he hit the world with in his first term — and on Thursday announced he would impose “reciprocal” tariffs that could inflict huge harm on the European auto industry.  The European Commission, which represents the bloc’s 27 countries on trade, responded by seeking dialogue.  Yet should negotiations fail, the bloc claims to be far better prepared than last time around. Its strategy: an iron fist in a velvet glove. “Especially with a personality like Trump, if we don’t react, he’ll trample us,” says Jean-Luc Demarty, who headed the Commission’s trade department during Trump’s first term. “We have all the instruments and we must react effectively on principle. ” Commission President Ursula von der Leyen has vowed a “firm and proportionate” response to the 25 percent U.S. steel and aluminum tariffs. Calling them unlawful, she said that Trump’s protectionist policies “will not go unanswered.”  But she also extended an olive branch when she met Vice President JD Vance on Tuesday in Paris, in the first high-level meeting between the two administrations. She called for cooperation in tackling a Chinese steel glut, describing it as a “critical” challenge for the two historic allies. EU trade chief Maroš Šefčovič also urged constructive dialogue in a call on Wednesday with Trump’s designated Commerce Secretary Howard Lutnick and nominee for Trade Representative Jamieson Greer. He won strong support for the Commission’s approach from EU trade ministers at an emergency video call directly after. For now, at least. It’s a balancing act for von der Leyen and Šefčovič as Trump sees red over America’s transatlantic trade deficit. The EU is a net exporter of autos, pharmaceuticals and food to the U.S. But it’s also a big importer of services — and that makes Big Tech a potential target for European retaliation.  NO MORE PLAYING DEFENSE After the shock of Trump’s first mandate, and nudged by France, the EU has strengthened its trade defense arsenal — first by revamping its Enforcement Regulation, which enables the EU to respond if breaches by partners in trade agreements harm its commercial interests. “Those who say the EU is ill-prepared are wrong: During the past term we have prepared ourselves exactly for a scenario that is unfolding at the moment. Because we have expanded our toolbox, we can now better defend our interests,” said Bernd Lange, a senior lawmaker who chairs the European  Parliament’s trade committee. Its first line of retaliation could be symbolic — reinstating the €2.8 billion in tariffs it imposed in response to Trump’s steel and aluminum tariffs back in 2018, including on Harley-Davidson motorcycles, Levi jeans and cranberry juice.  But Brussels knows symbolism alone won’t be enough to deter Trump. “What we did in 2018 was targeting products that don’t hurt us, but hurt them,” said Demarty, who also worked as economic adviser to Jean-Claude Juncker, the Commission president at the time.  “Politically symbolic products: Harley-Davidson, bourbon whiskey, corn. I was the one who personally added these products back then. My troops were totally tetanized at the idea of adding such sensitive products,” he added.  Another possible leverage is the EU’s regulatory arsenal, especially the bloc’s grip on Big Tech. It’s an area where Washington has skin in the game, with Elon Musk’s X or Mark Zuckerberg’s Meta in the EU’s crosshairs over the tech giants’ content regulation and sharing of data with authorities. As the world’s largest exporter of services, the U.S. could be a prime target for EU retaliation. Here, Brussels could add restrictions on American consulting and financial firms, revoking intellectual property rights, further restricting data flows, or increasing digital taxes on U.S.-based platforms.  THE LONG GAME  It was with a Trump 2.0 scenario in mind that the European Commission devised a way to hit back if one of its member states were subjected to economic blackmail, its Anti-Coercion Instrument.  “We now see in this Trump administration that coercion may become a standard form of behavior in U.S. trade policy,” said Ignacio García Bercero, who was the Commission’s point person on U.S. trade during Trump’s first term from 2017 to 2021. EU trade chief Maroš Šefčovič also urged constructive dialogue in a call on Wednesday with Trump’s designated Commerce Secretary Howard Lutnick and nominee for Trade Representative Jamieson Greer. | Nicolas Tucat/AFP via Getty Images While the tool was designed to put the Commission in the lead, EU countries sought to ensure they would still get to call the shots in determining whether Washington or Beijing crossed the line, and how any injury should be repaired.  A textbook scenario to deploy the tool might be if Trump — with his eye on annexing Greenland — imposes tariffs in a bid to pressure Denmark into surrendering control over the strategic Arctic island. Although it would first have to negotiate with Washington, the EU could then pull the trigger on its trade “bazooka,” with a process that could lead in as little as six months to increasing customs duties on specific goods, imposing quotas or excluding U.S. companies from public contracts in the EU.  But that all depends on national capitals — where a qualified majority of 15 out of the EU’s 27 member countries would be needed to back the Commission’s proposed course of action.  Should that not happen, “there is a fundamental problem with the way the European Union is working,” García Bercero concluded. Put another way, the EU may have equipped itself to fight the last trade war — rather than the next one.  For that, argues David Kleimann of the ODI think tank, it needs to create the legal basis for a new tool to respond in real time to a systemic trade threat — like the universal tariffs that Trump threatened on the campaign trail. “This gap can be temporarily addressed through ad-hoc stand-alone legislation once the need arises,” writes Kleimann. “But the time is now for the institutions to consider adding a more robust instrument of general application to its armoury to equip the Union for the coming era of trade wars.” This story has been updated.