US could escalate Europe trade tensions with sanctions over EU tech law dispute

The Trump administration is reportedly considering imposing sanctions on European Union (EU) or member state officials responsible for implementing the EU’s Digital Services Act (DSA). 

The potential sanctions, which could take any form, are linked to complaints that claim the DSA censors American voices and imposes significant costs on U.S. tech companies.

US accuses the EU of stifling free speech

According to sources cited by Reuters, Senior State Department officials are yet to make the final decision on whether to go ahead with the punitive measures that would likely come in the form of visa restrictions.

For now, it is unclear which EU or EU member state officials the action would target, but sources claim US officials have been holding internal meetings on the topic since last week.

Whatever the final decision is, it is likely to have a huge effect on the already frayed relationship between the Trump administration and the European Union.

Citing an internal State Department cable, reports earlier this month claimed that the Trump administration has instructed U.S. diplomats in Europe to launch a lobbying campaign to build opposition to the Digital Services Act in an effort to have it amended or repealed.

The EU’s DSA has been touted as a law that will make the online environment safer, partially by forcing tech giants to do more to tackle illegal content, including hate speech and child sexual abuse material.

However, Washington has accused the EU of pursuing “undue” restrictions on freedom of expression with its efforts to combat hateful speech, misinformation and disinformation, and that the DSA only makes things worse.

In an early-August directive, Secretary of State Marco Rubio ordered U.S. diplomats to convey the U.S. concerns about the DSA and the financial costs for U.S. companies.

Before that, in May, Rubio threatened visa bans for anyone found guilty of censoring speech by Americans, including on social media, while he suggested the policy could target foreign officials regulating U.S. tech companies.

Europe’s dependence on America continues to show

If the potential sanctions America is now considering are enacted, it would be unprecedented and could further strain already tense EU-U.S. trade relations, which have been marked by tariff threats and contentious negotiations.

The present conflicts have already confirmed how dependent the EU is on America and not just for protection. As things stand, just three US giants – Google, Microsoft and Amazon – provide 70% of Europe’s cloud-computing infrastructure, the foundation on which many online services depend.

And some have questioned whether an unpredictable U.S. leader like Trump would consider weaponizing the situation if relations deteriorate even more – for example, by ordering those big tech companies to turn off their services in Europe.

“Critical data would become inaccessible, websites would go dark, and essential state services like hospital IT systems would be thrown into chaos,” Robin Berjon, a digital governance specialist who advises EU policymakers, said.

Berjon believes concerns over a so-called U.S. “kill switch” should be taken seriously even though Microsoft, Google and Amazon all claim they offer “sovereign” cloud computing solutions that safeguard EU clients’ data and would prevent such a scenario ever occurring.

Fears of America resorting to using the alleged kill switch got even more urgent in May when rumors claimed that Karim Khan, the top prosecutor at the Netherlands-based International Criminal Court (ICC), lost access to his Microsoft Outlook email account after getting sanctioned by the White House.

Microsoft claims that “at no point” did it cease or suspend its services to the ICC, although it was in touch with the ICC “throughout the process that resulted in the disconnection”.

Since then, digital sovereignty has climbed to the top of the priority list in Brussels and reports claim some public bodies are already seeking alternatives to U.S. providers.

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