EU Needs Concrete Plans to Counter Trump's Economic Pressure, Analysts Say

The European Union is bracing for further economic pressure from the United States, following recent trade agreements and new White House actions. Analysts at the European Council on Foreign Relations (ECFR) warn that Europe needs a clear strategy to respond to what they describe as "growing economic coercion" by the Trump administration.

Recent moves by the US include prohibiting the AI company Anthropic from offering its new models outside the United States. Additionally, President Trump has threatened a 100% punitive tariff on French wines if France does not abolish its digital services tax, which has been in place since 2019. These actions suggest that US pressure on Europe may extend beyond trade tariffs.

The ECFR analysis outlines three potential scenarios for US pressure: pressuring European states to sell US Treasury bonds to devalue the dollar, leveraging Europe's dependence on American LNG for concessions in energy and investment, or pushing the EU to repeal its digital laws. The analysts argue that these are not hypothetical concerns, given recent US behavior.

To counter these pressures, the ECFR proposes a three-pronged strategy for the EU: damage mitigation, deterrence, and escalation. The analysis delves into specific digital policy scenarios, such as the US directing cloud providers to deny services to European governments and restricting Nvidia chip exports to Europe. The authors suggest that attempts to appease Trump by reducing EU investigations into US digital firms are likely to be ineffective.