How the EU's trade 'bazooka' could hit the US tech sector

"The anti-coercion instrument, introduced in 2023 and so far unused, is designed to deter foreign governments from applying economic pressure against EU member states. It provides the legal basis for the EU to impose a broad range of retaliatory economic restrictions, allowing it to escalate its response without relying on traditional trade dispute procedures. Countermeasures could be applied to various industries. In the case of the US, technology services - including cloud computing and software - would be potential targets."

"The EU and the US have the world's largest bilateral trade partnership. But while the US has a significant goods trade deficit with the EU - everything from German cars to Italian wine - it's a different case for services, where the US ran a €109 billion surplus in 2023, or roughly $120 billion. (The European Council, citing EuroStat data, put the EU services deficit at €148 billion in 2024, or about $158 billion. The deficit figures vary, depending on source.)"

The EU's anti-coercion instrument enables the bloc to impose a wide range of retaliatory economic restrictions against foreign governments that apply economic pressure on member states. The instrument, introduced in 2023 and not yet used, allows the EU to escalate responses without traditional trade dispute procedures. European leaders considered its use after the Trump Administration threatened tariffs related to Greenland, and potential countermeasures could target multiple industries. Technology services, including cloud computing and software, are likely targets in a dispute with the United States, where the US runs a large services surplus with the EU, making digital services a vulnerable leverage point.

Read at Computerworld