EU Warns of Trade Deal Review Amid US "Digital Retaliation" Threats
Although the United States and the European Union (EU) have already reached a trade agreement, new tensions are rising as President Donald Trump pressures the EU to withdraw digital regulations, and the EU responds by raising the possibility of reviewing the trade agreement.
According to Politico Europe on the 27th (local time), Stefan Sejourne, EU Executive Vice President for Prosperity and Industrial Strategy, attended a conference hosted by the French Business Confederation (MEDEF) on the same day. When asked whether the trade agreement with the US would remain valid even if the current US digital policy stance continues, he replied, "So far, we have only heard intentions, but we have not heard any (policy) declarations," adding, "If those intentions turn into declarations, then this (trade agreement) will need to be reviewed."
Previously, on the 25th, President Trump stated regarding digital regulations, "Unless discriminatory measures are removed, we will impose significant additional tariffs on that country's exports to the US and introduce restrictions on the export of technology and semiconductors, which we strictly protect." While President Trump did not mention any specific country or economic entity, analysts point out that the EU is likely to be a primary target, given his repeated expressions of dissatisfaction with the EU's Digital Services Act (DSA) and Digital Markets Act (DMA).
In an interview published the previous day with the French daily Le Figaro, Vice President Sejourne addressed criticism that Europe had capitulated in tariff negotiations with the US, saying, "The balance of power was not in favor of Europeans," and "The mission given to the Commission was very clear: to avoid an escalation of conflict and to prevent a 'no deal' outcome." He continued, "The Commission President considered not only the instructions from member states, but also the pleas from business leaders to refrain from retaliatory measures that could provoke diplomatic conflict with the Trump administration," and added, "It is unfair to criticize this belatedly."
He stated, "International trade has now become a geopolitical issue," and, "As Mario Draghi (former President of the European Central Bank) pointed out, commercial power can no longer substitute for geopolitical power." In a report published in September last year, former President Draghi pointed out that the EU's global competitiveness faces an 'existential risk' and called for a new survival strategy.
Vice President Sejourne said, "The EU's weakness lies in its very structure. President Trump linked different issues such as trade, defense, and the territories of Canada and Greenland, but not all of these fall under the EU's jurisdiction," and added, "Given these constraints, this agreement is not perfect, but it is much better than what other countries like the United Kingdom or Japan have achieved." Regarding the fact that major European exports such as wine and spirits were not included among tariff-free items, he said, "We made every effort to secure as many exempt items as possible," and added, "We must continue negotiations to obtain further exemptions."
Meanwhile, the EU aims to diversify its trade relations beyond the United States by finalizing a trade agreement with the Southern Common Market (MERCOSUR). However, some countries, including Vice President Sejourne's home country of France, strongly oppose a free trade agreement (FTA) with MERCOSUR. On this matter, Vice President Sejourne stated, "A trade agreement with MERCOSUR could provide answers for certain industrial sectors, but we must address the concerns of farmers," and added, "France is currently proposing measures at the European level to protect farmers."
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