Let me clear the air first, because the rest of this only makes sense if you know where I’m standing. I don’t like this president. I think the tariff program he has run for the past eighteen months has been improvised, legally reckless, and expensive in ways his own voters are only starting to notice at the register. The Supreme Court threw out his signature tariffs earlier this year, and it was right to. The replacement round he announced Thursday, ten to twelve and a half percent on goods from more than eighty countries on a forced-labor rationale, drew a federal lawsuit in the Court of International Trade before the day was out. I have written some version of “this is not how trade policy is supposed to work” more times than I care to count.
And on the European Union’s treatment of American technology companies, he is right. Not partly right. Not accidentally right. Right.
On Thursday, Brussels fined Google 890 million euros, about a billion dollars, for arranging Google Play and its search results to funnel users toward its own services. On Friday, Trump said the administration will open a Section 301 investigation into EU trade practices, asserted the penalties would be entirely reversed, and promised a substantial tariff at the earliest possible moment. He also said that the United States is not a piggybank for Europe.
The vulgarity is doing a lot of work in how this gets received. Strip it out and you are left with a proposition a serious person can defend: the European Union has built a regulatory machine that operates, in practice, as a revenue transfer from American firms into the European budget, and calling it competition law does not make it competition law.
Follow the money, then ask who it was supposed to help
Start with the simplest test available. When a competition authority finds that a dominant firm has harmed rivals, the remedy should either make those rivals whole or change the conduct. The EU’s fines do neither in any direct way. The money goes into the general budget of the European Union. Not to the app developers who were supposedly disadvantaged. Not to the comparison-shopping sites. Not to a single European consumer. A billion dollars leaves Mountain View and lands in a treasury that funds farm subsidies and cohesion payments in member states with no connection whatsoever to the underlying dispute.
There is a word for a charge that flows to a government treasury, calculated as a percentage of global revenue, based on conduct that same government defines after the fact. The word is not “remedy.”
Then look at who pays. The Digital Markets Act designates a small class of gatekeepers, and that class is almost entirely American. Apple was hit for 500 million euros and Meta for 200 million in the first DMA enforcement round. Google has now been fined four separate times across a decade-long campaign, including 2.95 billion euros over its advertising business. You can construct a defensible legal theory for any one of these. What you cannot do is look at the cumulative list and pretend the nationality of the defendants is a coincidence. When a regulatory regime applies to a category of firms that turns out to contain almost nothing but foreign companies, and when the domestic firms in adjacent markets are the complainants, that regime is trade policy wearing a lab coat.
The part Europeans should be angrier about than we are
Here is what genuinely puzzles me. Americans have the smaller grievance. We are out some money. Europe is out a generation.
The tell is that the strongest indictment of Europe’s digital rulebook was written by Europeans. Mario Draghi, a man nobody has ever accused of Silicon Valley sympathies, delivered a competitiveness report to the Commission that reads like a coroner’s summary. Regulatory complexity and fragmentation, he found, are a first-order cause of the continent’s productivity gap with the United States. Not the weather, not the euro, not energy prices alone. The rules. He noted that no company founded in Europe in the past fifty years has reached a valuation of 100 billion euros, while all of the firms above a trillion are American. He warned of a slow agony. His government heard him and then spent the following two years passing more rules.
You can see the cost in the most literal way possible. New products routinely ship in the United States months or years before they ship in Europe, and sometimes never. AI assistants launch in fifty countries and skip the single largest bloc of wealthy consumers on earth, because nobody’s counsel can tell them what the AI Act will mean until an enforcement action explains it. A German engineer who wants to build something at scale raises money in the United States, incorporates in Delaware, and lists on the Nasdaq. Spotify did it. Klarna did it. Arm looked at London and chose New York. This is not a mystery requiring further study. It is a market clearing.
Compliance costs are regressive in the way all fixed costs are regressive. Alphabet can absorb a billion-euro fine and hire two hundred more lawyers in Brussels. A forty-person startup in Tallinn cannot. Every incremental obligation in the DMA, the GDPR, the Data Act, and the AI Act widens the moat around exactly the incumbents Brussels claims to be constraining, and drowns the European challengers who would otherwise be the beneficiaries. Two decades of this has produced no European search engine, no European app store, no European cloud of consequence, and one credible European AI lab that is a rounding error next to its American counterparts.
What Europe has produced instead is regulation itself, exported worldwide, which its officials describe as a form of soft power. It is the soft power of a country that no longer manufactures anything issuing very detailed manufacturing standards. And the fines have become fiscally convenient at precisely the moment the Union needs revenue, which is the kind of coincidence that should trouble anyone who cares about the rule of law more than they care about winning this particular argument.
Where the president is still wrong
Being right about the diagnosis does not sanctify the prescription, and the prescription here is bad.
Tariffs on European goods do not touch a single regulator in Brussels. They land on an Ohio machine shop importing a German five-axis mill, on a Wisconsin cheesemaker’s competitors, on American households buying pharmaceuticals and cars. A twelve percent tax on Italian exports is not a rebate to Google shareholders. It is a tax on Americans, levied in the name of Americans who were never asked. Section 301 was designed to open foreign markets to American exports, not to serve as a general-purpose punishment device, and after the Supreme Court’s ruling this year the administration’s habit of reaching for it looks less like strategy than muscle memory. The lawsuit filed Friday afternoon will not be the last one.
There were better instruments. A negotiated digital trade framework with binding process guarantees. Mirror-image enforcement against European firms operating here, which would concentrate the pain on the parties actually responsible. Coordination with the United Kingdom, Japan, and Korea, who have their own quiet objections. Any of these would have been slower, less satisfying, and considerably more likely to work.
But I keep coming back to a fact I find uncomfortable. Three administrations raised this politely. The Trade Representative filed comments. Diplomats made careful speeches about regulatory divergence. The fines got larger. Brussels is finally treating the matter as a live negotiation rather than a filing exercise, and the reason is that someone was finally willing to be rude about it in public.
That is a lousy lesson to have learned, and it does not make the tariffs a good idea. It does mean that the people who spent Friday afternoon rolling their eyes at the piggybank line owe themselves a harder question than the one they asked. Not whether he said it well. Whether he was wrong.
He wasn’t.