Look for the United States to soon fundamentally change how it deals with the European Union (EU) on tech policy, and for the EU to wake up and start to finally treat leading U.S. tech companies with respect.
Since taking office, President Donald J. Trump has been blisteringly critical, and appropriate so, of the EU for its digital service taxes and a bevy of other confiscatory instruments. These are discriminately targeted at hurting just U.S. tech companies.
A series of digital taxes, onerous rules and regulations from the EU have resulted in tens of billions of dollars’ worth of fines against U.S. companies. Worse, the EU is threatening to seize more than 20 percent of the companies’ global annual revenue. Among other potential impacts, hundreds of billions of dollars of AI investments would instead go to European Commission bureaucrats.
The EU has dug in on these issues, remains unreasonable, and shows no signs of budging. But it will soon face economic and political pressure to do so.
On September 17, the President begins a three-day state visit to the United Kingdom. His delegation is expected to include leading tech executives from NVIDIA, OpenAI, Blackstone, Apple, and others.
As with an earlier visit this year with tech executives to the United Arab Emirates and Saudi Arabia, the President is likely to strike an agreement with British Prime Minister Keir Starmer, who is clearly seeking significant tech investments from U.S. companies for data centers and related AI technology. The framework for this was also discussed at a White House meeting between the two leaders on February 27.
On August 25, in a Truth Social post, the President warned the EU, and others with similar policies to U.S. tech companies, “that unless these discriminatory actions are removed, I, as President of the United States, will impose substantial additional Tariffs on that Country’s Exports to the U.S.A, and institute Export restrictions on our Highly Protected Technology and Chips.”
The EU then thumbed its nose at the President, announcing a $3.5 billion fine against Google on September 4. In a Truth Social post the next day, the President described this as a “hit” and admonished the EU for “effectively taking money that would otherwise go to American Investments and Jobs.”
The EU has failed to spawn any new, dynamic tech companies over the past 20 plus years, as Mario Draghi documented in a seminal report to the EU Commission last September. It is also content to try to make Google a de facto public utility.
The United Kingdom, and Prime Minister Starmer, though, have been watching what has been taking place in the U.S. where hundreds of billions of new investments are being made in data centers and related AI. They understand that this means well-paying jobs for construction workers, electricians, HVAC professionals, and many others.
Prime Minister Starmer and his colleagues also know data centers are long-term economic infrastructure, providing high-paying jobs and a financial shot in the arm for all businesses in the region, who will thrive from using expanded AI. And he also has likely surmised that having secured massive AI investments in the U.S., the Administration will now expand that to other cooperative countries.
Simply put, the EU is going to look really bad to its people as AI helps the U.S., United Kingdom, and other countries to have greater prosperity and a stronger economic outlook.
The face-saving solution to overcoming the EU’s onerous tech laws will likely follow what happens in the United Kingdom: an agreement for massive U.S. investments in return for scrapping the confiscatory laws and practices. Indeed, by forming a tech alliance similar to NATO, both the U.S and Europe will thrive.
For the EU, the path forward on AI is likely to become clear, as fear of missing out will likely take off following the President’s state visit to the United Kingdom.
