The EU is preparing to use an instrument against commercial blackmail and Trump’s ‘technocasta’

In the European Union they assume that Donald Trump will impose new tariffs in the coming weeks and, although the message is that a resurgence of the commercial war between partners does not benefit any of the two sides of the Atlantic, which have also made clear the Governments of the 27 and the European Commission is that there will be a “firm response.” President Ursula von der Leyen transmitted to European leaders at a meeting on Monday that the reaction would also be “fast.” At the moment, he is waiting for an “initial movement” of Washington.

What tools does EU have to respond to Trump tariffs? The traditional reaction is to return the blow with customs rates to the goods and services of the other country for a similar amount. It is what happened in 2018 when Washington taxed raw materials such as steel and aluminum, but also products such as black olive, especially worrying for Spain. The European Commission then responded with tariffs worth about 2.8 billion dollars to a variety of products, in many cases with great symbolism, such as Levi’s clothes, Bourbon whiskey or Harley-Davidson motorcycles.

The tariffs also arrived at the World Trade Organization, which declared them illegal years later, and the process entailed a negotiation with all interested parties. In fact, they were suspended between 2021 and 2022, and the extension ends at the end of March, which will be a decisive month because the EU is expected to conclude the investigation by violation of the online antimony law against Google, Meta and Apple. The date marked in red on the calendar is March 25.

And it is that the EU is in the middle of the perfect storm after the victory of the populist leader, whom the “technocasta” whispered, according to Pedro Sánchez to the magnates like Elon Musk or Mark Zuckerberg, to exercise pressure against the laws digital that regulate the big platforms. And that is where the EU has an ace under the sleeve that comes out of the traditional response to the commercial war and that Trump speaks.

A deterrent tool

In the previous battle of the commercial war, the EU ran into serious problems that did not come only from the US but also from China or Indonesia, who used the trade tool to try to condition European policies. For example, Beije boycotted Lithuania products for the diplomatic relations of that country with Taiwan; Indonesia also stopped exports by European regulation on palm oil; and the US threatened more tariffs to France, Italy, Spain or Austria so that they did not implement the tax on large technological ones.

With that situation, the European Commission designed the anti-coercion instrument, which offers a wide range of measures such as retaliation in case a third country tries to blackmail the EU by commercial route. Among the measures provided for is the increase in customs rights, import or exports, the exclusion of participating in public tenders or the suspension of international obligations in sectors such as intellectual property, insurance, banking, banking, etc

According to Financial Timesthe European Commission has on the table that instrument to apply it in the event that Trump takes commercial reprisals in response to digital regulations and, specifically, hitting large technological ones, which are stirred against those rules. At stake are billions of euros for the fines they face.

Wide range of options or “hypothesis” for the European Commission

The tool, however, has never been launched since its entry into force in 2023. In fact, the European Commission itself admitted in its presentation that “it intends to have, in the first place, a deterrent effect.”

As it has never been activated, it is difficult to predict what concrete measures could come into force and in the European Commission they do not want to enter “hypothesis” since at this time the possible movements of Trump are not even known. Experts mention, for example, a tax intensification. “If I were in the legal service [de la Comisión Europea]would invoke security limits. But are they going to have the political courage to do so?

The lawyer considers that the process can be interesting because “there will be an investigation with the interested parties and, at least, this disseminates information for the general public, and implies any interested party that can be affected or relevant, already either for or against ”. “It is a solidarity tool among the Member States. It is not the European Commission that decides to sue on the WTO itself. So it is a political evidence and a political courage forum, ”he says.

What the experts of that law firm specialized in International Trade is that the tool has lace in this situation. “If the application of the Digital Services Law (DSA) or that of Digital Markets (DMA) is challenged, it would be acting under coercion of a foreign country,” explains Jean -Baptiste Blancardi, associate of the firm, which does not enter into The speculation of what concrete measures could be adopted against the ‘Big Tech’: “Our experience is that the European Commission often finds the way.”

Beyond Brussels decided to take that step, it remains to be seen that European governments gave support to the activation of that instrument that requires the qualified majority of the Member States and there are countries that are more contemporary with Trump than others. “We have to propose something that may be interesting and attractive to the United States, such as free trade agreements in the car industry or how to buy more energy,” said the Lithuanian president, Nausėda gypsies. Hungarian ultra -right Viktor Orbán directly applauds everything that the White House now raises, even the displacement of the Gazaties to build the “Riviera de Oriente Medio”.

Fear is in some capitals, like Paris, there are countries, such as Italy, that they intend to go for free in the negotiation with Washington taking advantage of their good bilateral relations. Hence, the president of France, Emmanuel Macron, and the German Chancellor, Olaf Scholz, have called for the “unit.” “Our position is very clear. Europe is a vast economic space of about 450 million people. We are strong, we are united and Europe will not hide. It will be a constructive and safe partner. On this basis, we will have good cooperation, ”said the social democrat.

“The priority of Europeans must be even more Europe and in the first place our competitiveness, our prosperity, our security to strengthen our democracies and preserve our economic and social model,” said the French liberal.

The EU has reinforced its arsenal

The truth is that in the middle of the commercial war, the EU has had to develop strategies to try not to be left behind the US or China. Before the Law on Inflation Reduction (IRA) by Joe Biden, which meant injecting billions of dollars, the EU flexible the framework of state aids to allow states to match the offers of others countries to avoid business escape. In addition to the imposition of tariffs on electric vehicles manufactured in China that are flooding the European market thanks to the subsidies they receive in that country, Brussels has been adopting other protectionist measures to monitor investments or put a prection to the participation of the Asian giant in certain European public projects.