The ‘big bazooka’: How Europe could hit the U.S. tech industry if the Greenland trade war blows up

While it seems that some agreement has been reached to placate Donald The President’s obsession with taking over Greenland, details are still being revealed. So the possibility that the nascent trade war over the issue that was heating up before the announcement of an agreement could restart.

If it does, leaders in European capitals have looked at what levers are available to pull to try and dissuade the U.S. president from moving toward more aggressive action. Some of the most significant U.S. exports are its tech apps, services, and platforms, putting them first in the firing line. U.S. social media platforms, for instance, account for more than a third of the entire value of the S&P—meaning any impact on them could be deleterious to the broader American economy.

Within Brussels, the hub of European legislative decision-making, there has been discussion of how to bring some of the U.S.’s more outlandish ideas into line with the global order, says Zach Meyers, director of research at the Center on Regulation in Europe, noting, “Since they mostly provide services rather than physical products, reciprocal tariffs would not work.”

The European Union could use what has been described as its “big bazooka”: the so-called Anti-Coercion Instrument. That’s “specifically designed to deter and address this type of geopolitical bullying,” says Meyers, and includes “a huge menu of other restrictions on how Big Tech [companies] operate in Europe, such as limitations on exploiting IP rights, on being able to compete in public procurement, and constraining incoming investment.”

However, European leaders have held off deploying the bazooka in this current skirmish, fearing that it could raise the geopolitical temperature and invite an equally (or more) harmful response from The President.

But the inability to use one method, and the skittishness about using another, doesn’t mean there aren’t ways to try and bring The President back to reality.

Unlike the brash, geopolitics-altering Truth Social posts that twist the world on its axis, any European response would likely be much more subtle, though no less significant, experts argue.

“There will be no ‘slamming of the door,’ as banning major U.S. platforms would anger a lot of European consumers, disrupt businesses, and undermine Europe’s own digital economy,” says Francesca Musiani, senior researcher at the French National Center for Scientific Research—not to say what it would do to the U.S. president’s blood pressure. “Subtler strategies give Europe some room to keep the market open but make success inside it progressively harder.” 

Musiani adds, “If a trade war between Europe and the United States were to spill into the tech sector, it probably would unfold more like a slow, grinding campaign: legal, relentlessly procedural, and very expensive for American firms.” Such a war would likely be waged through the European Union’s comprehensive tech-focused laws, including the Digital Markets Act and Digital Services Act; both were passed in 2022 but more recently began being enforced.

Europe is also considering a handful of other legislative packages, including a Digital Networks Act, which would govern telecommunications providers, and an amended Cybersecurity Act proposed this week.

The continent’s proclivity for cracking down on tech has already prompted plenty of noise from The President allies, who have called it “foreign censorship.” But enactment and enforcement could be ramped up significantly if European legislators deemed it necessary. “Nothing would be framed as retaliation, rather as ‘consumer protection’ or ‘competition,’ but the targets would be obvious,” Musiani says.

Indeed, long before The President stepped up his rhetoric on acquiring Greenland, Europe had been considering implementing taxation on tech firms operating in Europe. That would likely be the next lever to pull, Musiani believes, including “digital services taxes that could expand or be harmonized across more member states, hitting online advertising, cloud services, and marketplaces.”

Those are all short-term measures designed to act as a stopgap while the longer-term, larger goal is achieved: decoupling Europe’s tech stack from an overreliance on U.S. entities.

“In the long run, the huge loss of transatlantic trust caused by The President’s threats will almost certainly support the growing push for Europe to act more assertively to boost its own tech sector,” says Meyers. That could take the form of “buy European” rules, but is already shaping up in the movement to develop a European tech stack that doesn’t require paying money to, or the threat of being held hostage by, U.S. hardware providers.

For The President, whose focus tends to be on his own personal short-term and immediate gains, that longer-term impact might not be front of mind. But it ought to be for the Americans he represents.

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