Insight
In transatlantic trade talks, the EU must keep digital policy off the table by Zach Meyers, 18 July 2025 The UK has shifted some of its digital policies to appease the US president. But Brussels should adjust its tech agenda to boost its own competitiveness – not to cave in to Donald Trump. The US president has just threatened to impose 30 per cent tariffs on the EU, if the two sides cannot reach a trade agreement by August 1st. This threat came as a disappointment to the EU negotiating team, which had understood both sides’ negotiating teams to be close to reaching a deal. European political leaders seem deeply divided between those urging further compromise and those wanting the EU to take a tougher stance, including by retaliating with tariffs on US goods and, potentially, on US services. One point of consensus in Europe so far is that full implementation of the EU’s digital policies – such as its laws on digital competition and online safety – is not up for negotiation. The UK did make numerous concessions on digital policy, which helped London secure a trade deal with Washington – one of only four the US has been able to strike, despite Washington threatening tariffs against almost all its trading partners in an effort to up the ante and quickly secure more agreements. However, there are three reasons why the EU should not water down its digital policies in the hope of a EU-US trade deal. First, the UK’s concessions are less substantial than they might first appear. Second, the UK does not appear to have secured significant benefit from those ‘concessions’ – nor did Canada when it withdrew its digital services tax. Third, there is little evidence that making concessions would secure an enduring deal. Europe’s digital policies require reforms and it would do no harm to present these to the US president as peace offerings. But policy-makers should pursue such reforms to stimulate Europe’s own innovation and economic growth – not as compromises to mollify a fickle US president. The most important factor holding back progress on a EU-US trade deal is that US demands on Europe are unclear. Those that are clear – such as to eliminate the bilateral trade deficit and secure “complete, open market access” to Europe – are largely unrealistic. However, one priority is unambiguous: the CER INSIGHT: IN TRANSATLANTIC TRADE TALKS, THE EU MUST KEEP DIGITAL POLICY OFF THE TABLE 18 July 2025
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