The visit of Italian prime minister Giorgia Meloni to the White House this week led to optimistic noises about a trade deal between the European Union and the United States. But whatever happens over the next 90 days, don’t expect this all to go away easily. And watch out as tensions spread beyond trade in goods to the world of the big digital service companies such as Meta, Google and X, which are key players in Ireland’s economy.
The tech bros running many of these companies rowed in behind Donald Trump in the run-up to the US presidential election. The question is whether they are now having buyer’s remorse, with the EU threatening to hold the European operations of these companies hostage if the tariff war builds up. Wider transatlantic tensions are also raising questions in the EU about the reliance on American tech and its use to spread Trumpish far-right political agendas. And beyond that the transatlantic split could yet have consequences for the way we all use the internet.
Tariffs are traditionally levied only on goods, so digital tech has not yet been dragged directly into the fray. But you can see the risks. Trump and his tech mates have been making noises about the regulation of these companies in the EU, where Ireland is central given the presence here of the international headquarters of many of the digital giants. Meta has likened EU regulation to a tariff on its activities. Hope for the administration’s support in this area was a key reason why Mark Zuckerberg, Elon Musk and the rest supported him.
Meanwhile, over the past weeks it has become increasingly clear that the European Commission wants to target the US tech sector if a trade war does emerge, with its president Ursula von der Leyen raising the prospect of a tariff on digital advertising revenues – the first time these taxes would have applied in the services sector. There is even some support in the EU to threaten more far-reaching measures against the big US digital service companies – potentially making it difficult for them to operate in the EU as part of a tactic to try to force Trump to the negotiating table on a reasonable basis.
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This all threatens to pull digital tech right into the middle of the trade war, something which Ireland – which benefits hugely from the operation of these companies in the EU – will try to stop. Many of the big EU players, however – and certainly the commission – seem to be thinking differently.
There are wider issues bubbling too. Social media is central to Trump’s promotion of his worldview and his interpretation of events. And his tech bro friends are on board here. Musk, the owner of X, has used his platform to express support for the far-right in Germany, for example, and has also stuck his oar into UK politics. Meta has also loosened its content controls significantly as part of the wider anti-woke Maga agenda.
The EU is, correctly, unsettled by this. Already European regulators have asked Musk for details of changes made in the algorithms which determine how content is delivered to his users – which, among other things, guarantee that they cannot avoid the ramblings of the man himself. Meta is being investigated since last year for not doing enough to combat the spread of Russian disinformation on Facebook and Instagram. A range of other probes are under way – the Irish regulator is looking at how X and Google used personal information to boost their AI development, for example. Can’t you just hear Trump in one of his Oval Office rants if big fines emerge?
A paper in the Foreign Affairs journal this month – The Brewing Transatlantic Trade war – by two US-based academics, Irishman Henry Farrell and Abraham Newman, gave a fascinating interpretation of these building tensions and their possible implications. They argue that these might not only endanger the business interests of US big tech in Europe, “it could also spell the end of today’s open internet, as Europeans look to build alternative platforms to those of the giant US tech firms”.
The Foreign Affairs paper sketches out a world where Europeans still use the internet as the technology foundation for their services, but increasingly use ‘alternative platforms on top, walled away from US interference through European-only business models and strong encryption’
Europeans, they point out, are increasingly seeing their reliance on US technology “not just as a competitiveness issues, but also as a critical strategic vulnerability that could be exploited against them”. Musk’s Starlink satellite, for example, is central to Ukraine’s war effort, underpinning vital communications for that country. In March, Musk boasted that Ukraine’s “entire front line would collapse if I turned it off”. Europe is scrambling to look at alternatives, but this takes time.
And just this week Trump’s administration threatened to withdraw funding from a US non-profit Mitre, which provides a framework for users worldwide to identify cybersecurity vulnerabilities. This is the service used by those who manage networks to identify urgent vulnerabilities that need to be fixed. The threat was withdrawn, though the funding was continued for only 11 months – and it shows that as well as the possibly malign political intentions of the US, sheer incompetence from a denuded public service is another threat.
Farrell and Newman chart the path from the early 2000s, when the internet was seen as a vehicle to help spread democracy, to today’s concerns over security and spreading right-wing political agendas. The tech bosses hoped Trump would hobble Chinese competitors such as TikTok and push back against European regulation which Zuckerberg has said is tantamount to “censorship”.
But wider questions are now being asked in Europe about US tech – not only the risk of something like Starlink being “turned off”, but also the use of the big platforms to spread misinformation and the impact of this on democracy. And as well as investigations by regulators, the two researchers point to the 2016 agreement which allowed data flows between the EU and the US as being “on the verge of collapse”, as the US administration dismantles the safeguards on its side. If this goes, it blows a hole in the business model of the big players.
We can only speculate what this may mean for the internet, which is central to our daily lives. The Foreign Affairs paper sketches out a world where Europeans still use the internet as the technology foundation for their services, but increasingly use “alternative platforms on top, walled away from US interference through European-only business models and strong encryption”. If this happens, they say, the US tech giants stand to lose billions in revenue and, through their cosying up to Trump, would have only themselves to blame.
