Little movement on the digital front as the US-EU tariff pause deadline approaches

The 90-day tariff pause between the EU and the US ends around July 9th. The original plan, approved by the US President and the European Commission in April, was supposed to make room for negotiations.

Despite many diplomatic statements about "being open to dialogue", the EU seems to be staying course on its adopted and planned digital rulebook, and the US is now busy with even more internal and external force majeures.

The Wall Street Journal reported today that the EU and the US are nearing a "deal on non-tariff irritants", including those for the digital sector, but we're yet to see whether the changes are significant.

What the Americans (don’t) want

Despite grandiose statements in the past about the “unfair” trade deficit between the U.S. and the EU, the reality looks quite different in the digital services sector.

According to AMCHAM EU, the US ran a surplus of at least $100 billion with the EU in 2023, and American tech accounts for 43% of all digital services in the European market.

Back in February, Donald Trump outlined the main concerns the U.S. administration has with how American tech companies are treated in the EU (and globally), citing the introduction of digital services taxes, the Digital Markets Act, the Digital Services Act, and more. 

The European Commission is holding its ground

Despite some left-leaning commentators in Europe criticising the Commission about "stepping back" from its’ original plans or even "deregulating", the European Commission has in fact held its ground, refusing to revise the EU’s digital rulebook, though occasionally issuing watered-down statements about being “open to dialogue”.

In April, the European Union fined Apple €500 million and Meta €200 million for non-compliance under the Digital Markets Act  - and we’re now just days away from hearing whether Meta and Apple will formally object.

The AI Act and its related measures, like the GPAI Code of Practice, remain on the table despite growing calls for delay. The Czech Deputy Minister recently proposed pushing implementation of the AI Act back by two years, and while EVP Henna Virkkunen didn’t entirely rule it out, the most significant development this sumemr - the GPAI Code of Practice - is still expected by August 2025.

The European Commission’s 2025–2029 agenda is packed with new regulations and initiatives. Naturally, many of the new initiatives are heavily politicized.

New regulations ahead

The EU hasn’t backed away from its plans to review the Public Procurement directives and introduce a preference for European providers in public tenders,  including for cloud services. 

The Commission also seems to be steadily moving forward with the Digital Fairness Act, which, while not banning personalized advertising outright, is expected to make it significantly harder for American tech platforms (and European SME's, as well as advertisers) by tightening the rules around ad personalization.

Last but not least, the Commission has recently launched a consultation on the Digital Networks Act, which aims to extend telecom-style regulation to the broader digital services sector, making compliance for U.S. tech firms even more costly and burdensome. The Commission has been open about wanting to reincarnate the controversial idea of "network fees" through a new IP interconnection dispute resolution mechanism between the ISPs and CSPs, among other things. Back in December 2024, EU Member State ministers were skeptical about the necessity of these new measures -  yet business continues as usual.

Having the cake and eating it too: sovereignty without protectionism

Since Donald Trump’s inauguration, the “Buy European” sentiment has gained traction across the EU. Some proposals have been more romantic and emotional, others more carefully thought through, such as the EU's AI Continent Action Plan with the clear (though modest) plans to invest in European AI infrastructure or Eurostack.

When the EU published its International Digital Strategy a few weeks ago, it sparked a debate over whether Europe is quietly stepping back from its tech sovereignty ambitions. Politico EU called  it a “reality check”, while Kai Zenner, one of the key proponents of the Eurostack idea, reminded everyone that “fighting for tech sovereignty does NOT mean protectionism”.

This was echoed by Germany’s new digital minister, Karsten Wilderberger, who spoke today about the need to “compete with U.S. cloud service providers”, as reported by Politico Europe. We wrote before that the newly established German Ministry for Digital Affairs outlined "digital sovereignty" as one of their core objectives for the following years:

Digital sovereignty  - on its new website, the German Ministry of Digital Affairs lists digital sovereignty as one of its six core principles, aligning with recent EU rhetoric and the long-standing position of France. Germany states that it “relies on European providers” and “systematically excludes untrusted technologies”. The Ministry later states that “recent geopolitical crises have demonstrated that technological dependencies pose a strategic risk”, and as a result, Germany is realigning its digital policy with a clear objective: achieving greater autonomy from “third-country technologies” and security through European cooperation and investment in key technologies. 

The concept of sovereignty without protectionism is hard to grasp while, at the same time, planning new regulations that target the very core of American tech companies' business models, or introduce a European-provider preference in public procurement.

Meanwhile, discussions about European sovereignty and high-risk suppliers - particularly in areas like 5G infrastructure - have quieted since the Huawei scandals in Brussels. At the same time, some EU Member States' willingness to ensure loopholes for the Russian gas bans is sparking dissatisfaction among many representatives from the EU’s Eastern flank, with questions like “Why are we focusing on independence from the US, not Russia or China?” growing louder.