Aegis Insights

Growing tensions between the United States and Europe over digital trade and technology regulation risk weakening the transatlantic alliance at a time of intensifying competition with China. Washington sees European rules as disproportionately targeting U.S. firms, while Europe views them as necessary to reduce dependence on American technology. Unless both sides address these differing threat perceptions and pursue regulatory compatibility, fragmentation could undermine their ability to shape global technology rules and allow China to fill the gap.

The European Commission is challenging Meta’s decision to restrict third party AI assistants on WhatsApp, arguing it may violate competition rules. The argument here is that forcing Meta to open its platform would undermine its vertically integrated AI model, weaken incentives for continued investment, and introduce security and operational risks. At a critical moment in global AI competition, such regulatory actions could slow innovation at a leading American firm and advantage foreign competitors.

Global trade is evolving into a form of mercantilist economic warfare where foreign nations use discriminatory regulations to target the U.S. tech sector, draining its wealth and undermining American innovation.

The EU’s Digital Services Act (DSA) imposes the heaviest regulatory burdens on large platforms in a way that overwhelmingly targets U.S. technology companies, exposing them to disproportionate compliance costs and fines while largely sparing European firms. This discriminatory model functions as a non-tariff attack that risks weakening U.S. innovation and competitiveness, and is now being replicated globally, amplifying the strategic challenge for American tech leadership.

The House Judiciary Committee has launched an investigation into South Korea's discriminatory targeting of U.S. tech companies, particularly Coupang, marking an important escalation in Washington's pushback against non-tariff attacks that use regulatory measures to weaken American technology leadership. These attacks—which have cost U.S. tech companies over $30 billion globally in the past decade—disproportionately target American firms through fines, operational restrictions, and forced infrastructure investments while creating openings for Chinese competitors.

Korea now faces a clear choice between abandoning discriminatory policies disguised as domestic regulation or risking losing access to American semiconductors and advanced technologies on which its own tech sector depends.

The EU’s €376 million fine against Intel for decades-old conduct risks weakening a struggling Western chipmaker at a time when China is heavily investing to dominate the semiconductor industry.

With limited bandwidth for negotiations, we can no longer afford to treat all trade sectors equally. The administration should focus on what matters most for America’s economic and national security future: defending our technology industry from foreign attacks.

U.S. trade negotiations must go beyond tariffs to confront the growing trend of foreign governments targeting American tech companies with discriminatory regulations, taxes, and fines. These non-tariff attacks undermine U.S. innovation and global competitiveness and must be a central focus to protect America’s techno-economic leadership.

To maintain global competitiveness, the U.S. should support its leading tech companies, ensuring they have the scale and capital needed to drive AI and technological advancements, rather than subjecting them to restrictive regulations that benefit foreign competitors.