Concluding days of 2025: Europe – already discombobulated by the White House National Security Strategy document that sent everyone reeling and unleashed a torrent of “shock horror” postings on social media – has been again losing its collective mind over the US Administration’s travel ban against ex-EC Commissioner Thierry Breton and four civil society activists running outfits that “flag illegal content” online. The deep shock and vocal outrage meeting this latest development are predictable (JD Vance told us this would be coming already in Paris/Munich 10 months ago); but vacuous as they amount to the usual pointless beating of chests: confirming the view of many in the Administration that the European elites presiding over what they see as a crumbling institution (the EU) are entitled, sulking over lèse-majesté, but ultimately incapable to actually muster any response. What they see is mass puffing of chests, “we will defend our laws!”, “we will defend our democracy!”, but nothing more: the classic “armons-nous, et partez!” that European politicians, intellectuals and commentators serve up each and every time. “We do not care how long Europeans scream at us” – said JD Vance again over the weekend. The general public is at best indifferent and at worst exasperated with EC dithering and inaction.
The main point of this post is that while everyone is acting as if the latest episode in the slow-motion car crash of EU/US relations is shocking and unexpected – “ohmygod look at what they are doing now” – for anyone “reading the room” it was all there, clearly laid out, for months. Big Tech actors think European regulations are dumb or worse and are weaponizing the Administration to beat down rules they don’t like. But there’s much more at play, as the Administration has abandoned old norms and now pulling multiple levers at once to reset terms of engagement.
Looking back on the first six months of my Escape Forward podcast, I see the breadcrumbs, the pieces of the mosaic were all there. In discussion with Americans (Republicans and Democrats) and Europeans, on technology policy and more broadly, the picture that emerged was clear: the US is exercising hard power, dropping unconditional support for Europe and intent on giving shock treatment to what it sees as an ossified institution (the EU) only capable of “climbing on a moral high horse”. It is upending past norms and pushing for a fully transactional approach in which “everything is in play”: trade policy and digital rules, freedom of speech and investment, reshoring manufacturing and defence. All in play. “Show us what you’ve got that we can do a deal over”. No surprises.
And yet, Europe is ending up once again with shock horror, laments, avowing its unique “values”, and shaking its fist in impotent rage. What a spectacle. Like that will do anything. Like any of these grandiloquent claims (“we defend our values”) will suddenly generate fulminant insight within the Trump Administration. Come. On. The only possible approach, as Julius Krein said, is “get transactional” – figure out what we can trade, what hill we should or should not die on, and what we can profitably pursue together. This should include the “unthinkable”. Experiments in digital regulation have not delivered anything much but Europe keeps pretending otherwise and boxing itself into the position of defending a failure on principle. The only area where I see positive ground for hope is refocusing on the massive effort needed to BUILD our own stuff. This is the message for 2026.
For now, here’s a quick run through some highlights of the first 6 episodes – and how they were altogether the history of a shock foretold – if you were paying attention.
In the first episode, “America First” vs. the “Draghi Mission”: Is the US Upending the World Order, and can Europe make it?” (back last July) , Oren Cass Chief Economist at American Compass had a strong exchange with Sander Tordoir of the Centre for European Reform on tariffs and trade and China and industrial policy, where he also laid out the conservative US perspective on Europe (not speaking “for” the Administration, but as an informed voice).
“…The prior view the US had, that it would be the unchallenged hegemon and bear a range of burdens on behalf of the world, has turned out not to be a sustainable arrangement...Other countries increasingly abused the open American market – the mercantilist East Asian economies, but also the EU and Germany in particular. The US was bearing increasing costs and seeing declining benefits… As Secretary of State Rubio said within his first week of taking office, the “unipolar” world is over, the US no longer plays that role in the world.
…What US policymakers are focused on doing right now is changing the best alternative to a negotiated agreement. It was always understood that the US might ask for things and if it didn’t get them, there was still an open American market for everybody. The Trump Administration has said “that is over”. We have some things we are going to ask for. And if we don’t get them, we don’t think the best alternative is just shrugging and offering an open market anyway. We believe the best alternative is now closing off the market. We would love to have an open market for allies who treat us fairly, who are committed to balanced trade, who bear their share of the defence burden, who also commit to keeping China out. But that is no longer a free ride. A lot of countries, including very close allies, are very frustrated with this. They liked the freeride a lot better. But as they come to understand that it really is over, there is going to be a lot of space for agreements that serve US interests better, but are also a lot better for these allies than any other options they might have.
[An element of this is what the Administration sees as] an essentially unfair treatment of US companies…. what the US is saying to rest of the world and to Europe is look, we are the centre of most of the innovation you are so interested in. We are the market that you are overwhelmingly reliant on in a lot of cases to support your own economic priorities. And we would like to balance that. We would like to make sure this is an arrangement in which the long-term interests of the US are being served well.
…in the U.S. too we have issues with the way these Big Tech companies are behaving. But where I see problems is the fines strike me as to a significant extent extractive, … seems like you’re taking a pound of flesh. The right path forward is to actually have this conversation. But the US is at this point going to assert what it sees as its interests in that matter. And it is no longer the case that it is up to everybody else to decide “here’s what we can extract out of the deal” as it is these American companies that seem to be doing all of the innovation.
… what the Trump Administration is saying is (…) if you are giving tech companies access and they are dominant but you are taxing them in a punitive and extractive way, that’s every bit as much on the table as a tariff. If you are using drug price controls to essentially force the entire cost of drug development even for European drug companies onto the American market, that’s on the table too. And for that matter, if you are spending a very low share of your GDP on defence and expecting the US to bear the burden of securing the world, that’s on the table too. Refusing to see free trade as just this narrow standalone lane where you get tariffs right through the WTO is central to what’s going on. What the Administration is saying is tariffs are a tool of statecraft, they are one of the ways the US exerts its power and leverage and tries to address a whole host of issues, including immigration policy for that matter.
… Europe may have made nice noises for going on a decade now, but has not been serious. Europe has behaved like the adult child living in the basement playing video games all day, it has been doing so for a couple of decades when it comes to defence. The US tried everything and none of it worked. And you can offer the kid to help write their resume. You can set up job interviews. And at some point, if the kid just says, thanks, I’m going to sit here and play video games, all that’s left is to throw them out of the house and hope they land on their feet. I am very pleased to see the sorts of commitments that European countries are starting to make now at the most recent NATO summit. At the same time, I don’t think the way this works is that Europe can behave the way it has for the past few decades, and then finally say, OK, look, we promised to do something. And like, that’s it. Congratulations, but Europe has a long way to go before it can genuinely claim to have earned back trust on these issues.
…A good future trading relationship between the US and Europe could still see, for instance, some higher level of manufacturing in Europe and some higher level of tech and finance in the US. If that’s happening in context where the US and Europe have agreed together and ideally with the rest of North America, Japan and India, the other Anglosphere countries, that they are going to maintain much more balanced trade within a system that keeps China out - that would be entirely satisfactory to the US.
…And if we were to forecast what is the best we could hope for, it is exactly that, that the US and its allies reach a new settlement where there is an alignment of interests, there is mutually beneficial trade, there is sharing of defence and security commitments in various ways, but these various regions are much more able to stand on their own. That would ultimately be beneficial to those regions and allies and to the US as well. That’s what I hope for.
…But what I remain very concerned about with Europe is the internal political dysfunction - I don’t know Europe’s going to get there. I think it is a lot easier to see how other parties the US is negotiating with can get to a solid agreement. I don’t know if Europe does. And so if I were to guess who is going to be the outlier who’s hanging out there in a few years and maybe struggling to find a path forward, Europe would be first on my list. That is the concern I have. And that would be unfortunate for the US as well”.
So it’s all there. All of it. You will have to listen to the episode (or read the transcript) for my pushback, but this is the view: man-child in the basement, grow up, do mutually beneficial deals. Don’t like the analogy? Okay have you got a plan for engagement?
In Episode 6, The European Discombobulation Over the US National Security Strategy (December, just after publication of the White House document that shocked so many and triggered waves of European hysteria on social media), Julius Krein of American Affairs doubled down on several of these points – again from a conservative US perspective:
“If Europeans took a more material and concrete approach to the relationship, it would be healthier. Europe is going through its own “China shock” and deindustrialization that the US went through first. And given the way China has structured its economy, whether Americans and Europeans like it or not, or like each other or not, they’re facing the same problems. It would be best to focus on the positive, on forms of cooperation that could be achieved on the economic front. There’s going to be limited agreement on the “culture war” issues, but still a lot of potential for pretty healthy cooperation on other issues. One can make criticisms of how the Trump Administration has handled that. But I also think that Europeans, mostly through sclerosis from what I can see, have also not been the best partners either.
…There’s genuine confusion (in the US Administration) that Europe seems unable not only to fix its problems, but even to assert its own interests in a productive way. For example, on tech (and people will not like me for saying this), there’s probably a real negotiation there where Europe has a lot of impressive industrial assets, mostly these legacy companies, legacy family-owned industrial businesses. There could be a lot of very beneficial collaboration. …But these discussions don’t ever seem to happen. To Americans it seems like Europeans are always complaining about something, but they’re never showing up with an actual solution. It doesn’t seem that you can get your act together. So there’s a deep confusion that there’s some kind of deeper root problem that that we don’t even understand.
.. China does these one-sided exchanges, technology transfers in order to build up its own companies (Google and Facebook are not very big in China, they have their own actually); even Russia has its own social media networks. Americans don’t like it, they would prefer everybody used Google. But we understand what they are doing…. In the European case, you’re not really building any of your own things. You’re just doing this seemingly pointless regulation to extract some fines or whatever.
…Europeans really don’t like the idea of transactional diplomacy. They want everything to be based on some kind of moral principle. And that’s not how the world works, that’s just gone. It’s a multipolar world now, there’s no one to uphold these principles. It’s not going to be based on what some Commission thinks is the ideal policy practice. Americans in the main have moved past that and accepted it. But for Europeans, it’s pretty much all they have. Going to a transactional arrangement is very scary for them, because they don’t necessarily have much to offer. And that’s unfortunate for everybody.
…the US has made its interests very clear, and it’s open for business. And if the Europeans want to come and do a real negotiation, Americans would understand that, and would try to find mutually beneficial areas there. There’s going to be disagreements. They’re not going to agree on everything, but we’re actually waiting for Europe to make us an offer on things that work for both sides. The moral blackmail just doesn’t work. Saying you don’t like US policy, and it’s full of fascist – nobody cares. Nobody cares. Absolutely nobody cares”.
Again, there you have it. It’s all there. He reflects the fundamental contempt in many conservative circles for a European institution (the EU) which cannot get its act together and is seen as constantly falling back on “moralizing”, “the rule of law”, “defending our values” – instead of getting transactional and looking for ways to do beneficial deals. European elites who are typically non-commercial (politicians, lawyers, academics, civil society and think tanks) may well be horrified but what’s the point? How long can we continue to rip our clothes and throw ourselves on the floor in response? Be “shocked and horrified”? Does that do anything? Does it persuade them to change tack?
And it’s not as if this is only a Republican diagnosis. In Episode 3 “The New Toolkit of Power: Finance, Dealmaking, Champions” (October) Rohit Chopra former Director of the Consumer Financial Protection Bureau and FTC Commissioner, gave a fascinating analysis of how New World Order we thought was taking shape during the Biden years is being entirely upended and is not coming back. But also, that the view of the current Administration that Europe is “not pulling its weight” is not new.
“ …On both sides of the Atlantic there are headlines about tariffs and other aspects of the trade war, but one thing that is so underappreciated is how much what we are seeing is the result of a feeling of resentment that many in the US political system have with the rest of the world… tariffs are not simply being used as a tool to reinvigorate particular industries, but a way to negotiate completely different sets of rules.
…What seem to be animating so much of today’s issues is a sense that the US, through its own contributions by its citizens and taxpayers, has really funded an enormous security umbrella for so much of the world, particularly Europe and NATO members. You have seen for many years the annoyance of multiple US administrations about the lack of defence contributions from EU member state budgets toward the defence umbrella, a sense that the US is shouldering the burden of keeping the world safe.
…There is a broad sense among the American public that they are fatigued. We are fatigued of overseas conflicts. Why is it that Americans are often holding the bag or paying the price financially for it? I think what you’ve seen in some of the Trump officials, but particularly individuals in the financial space, is they were openly saying and openly writing in the months before they took office, that countries should be paying more. And not just paying more in terms of their own defence spending, but they should be grouped into good countries and bad countries. And if they are a good country, they are going to be supporting the US financially in terms of investments, as well as with the purchase of US treasuries”.
The episode was about much more: also a wide-ranging discussion of the Administration’s view that the dollar is structurally overvalued, of the effort to “occupy” the Fed, tariffs of course, taking equity stakes in companies, extensive dealmaking to exert power over key sectors like the media, hijacking the rule of law, and the mutual dependency with the Big Tech barons in the front row at the inauguration. Big Tech companies are now protected abroad by the Administration, and the message to Europe is “on regulation you should just back off. These are the great American heroes” in contrast with the previous administration which had a clear drive to address monopoly power in digital with multiple antitrust actions, and even an appetite for “European style” regulation. “America First” antitrust is having to pick its way through the Administration’s multiple interests – it is continuing to pursue some ongoing cases (confusingly, in fact, started under Trump 1) against Google and Meta, and against Amazon (for now), while at the same time in an ambiguous relationship with the same Big Tech barons.
As put by Rohit Chopra: “now we are seeing they’re just flipping a switch and saying these powerful entities, why break them up? Why not just hold a sword of Damocles over their head so that they serve exactly what we want? And we’re seeing in so many different ways those tech CEOs are bending the knee”.
Critically, “the past is not coming back”.
“...Using the same old playbook and returning back to the old ways of doing things is not an option. The old way of doing things is part of what got us where we are today. …So instead of reflexively criticizing any type of change, we will need to do things that were not done before. There will need to be different ways of thinking about how our economy works… The answer is not going to come from one place. It’s not going to come from a political party or a specific academic bench. It is going to be an intense fight of ideas for how this new global financial and economic statecraft will work. And whether it’s thinking about the monetary system, or the future of our trading system, the rules of the game are going to change, they will not revert to the past”.
So this is the “big picture” background from both sides of the aisle: Europe is perceived as not having pulled its weight, a judgment which held true for Democrats as well though more urbanely expressed; and past norms are absolutely not coming back. Europe needs to adapt to a new norm of hard power exercised by the US in multiple dimensions with multiple tools, deployed all at once in what is described as a “transactional” approach.
In Episode 2, “Where is US Antitrust Going?” (September), Roger Alford former Deputy AAG at the Antitrust Division of the DOJ, sacked because he stood up courageously against the influence of lobbyists in the HP/Juniper deal, explained how “America First Antitrust” shifted the focus of the Division under Trump and AAG Gail Slater to “pocketbook issues” that matter to ordinary Americans, while on Big Tech the conservative distrust for regulation remains acute. So no hope even the antitrust bubble would warm to European-style regulations.
“Gail Slater uses the phrase “scalpel” in contrast to regulation, which she calls a “sledgehammer”. When she talks about antitrust as a scalpel, what she means is we should be really laser focused on specific, discrete problems and trying to address those problems through litigation and enforcement. That doesn’t mean you’re not aggressive. A scalpel is supposed to do surgical strikes on cancers, and what it means is that you don’t need to take a regulatory approach to antitrust enforcement. There was also an Executive Order on Deregulation, and the focus there is that a lot of regulations are anticompetitive…so let’s eliminate burdensome, anticompetitive regulations that often are subject to agency capture”.
Zero affinity for a regulatory approach. Regretfully, antitrust enforcement has not yet delivered much globally in the fight against digital monopolies.
“I would say in the first Trump administration there was a strong interest in addressing Big Tech antitrust violations…But I agree with you that (the outcomes of these big trials) are discouraging… the bigger point is that these cases are way too expensive and take way too long. Google literally just benefited from its delay tactics”.
Also superstar guest, sci-fi writer and activist Cory Doctorow in Episode 5 Enshittification of our digital experience: the pathology is clear, but is there a cure? (November) concedes that antitrust and regulation are struggling to deliver (so far) when it comes to dispersing the power of digital platforms.
We discussed “Enshittification” – the famous term he coined to describe the decline of online platforms, now captured in his latest book. “Enshittification” is essentially “lack of discipline for monopolists”: the “discipline” that constrained actors in the early “Good Internet” has dissipated, and this manifests itself in multiple ways in our experience as consumers and workers. “Cures” should include tech workers’ power, interoperability and indeed antitrust and regulation ensuring “new market entry”. But the current state of play is that antitrust has not realistically delivered any change on the ground, and for regulation the jury is out (to put it charitably).
Cory is still hopeful about tech rules having been adopted around the world, but recognises we did not get places so far: “Something happened in the world that reversed the law of political gravity. Political pigs started to fly. Political water started to flow uphill. I don’t think anyone knows where it came from. I don’t pretend to know where it came from, but something really big happened. There is a tail wind blowing. It has not yet taken us anywhere yet… It’s just blowing but the Sherman Act was in 1890 and they didn’t break up Standard Oil till 1912... So I wouldn’t mark it off as dead yet. I lament Judge Mehta’s failure and the failure of these enforcement actions in Europe. And yes after the last several years we can really say it is hard to impossible for the European Commission and for Member States to make American tech giants do anything right. They have an infinite arsenal of delaying tactics and ways to challenge things… but I think we’re not out of moves. I’m not saying we’re going to win. I’m saying we’re not out of moves here… on independence from American tech, there is quite a coalition brewing… there’s potential for a global race to see who can provide the tooling for independence from American Big Tech first, with enormous spoils to the winner, because there’s an industrial policy aspect to this”.
Exactly, so we ended up talking about the bright side of what in all of this, Europe can really be doing to lift itself from its predicament and not be stuck in a fight over regulation of digital platforms which at the moment is just a pantomime: “we are enforcing!” Europe says. “We are not compromising! We are not trading off digital regulation for tariffs!”. But in reality we are slow walking it and soft pedalling as much as we it possibly can not to upset the US Administration which hates it. What’s the point? Where does that leave Europe?
As I keep saying, we need to refocus ALL energy on BUILDING EUROPEAN TECH. This was the uplifting message of the wonderful Episode 4, Europe’s Quest for Digital Emancipation: Possible & Necessary (November) with Rafael Laguna of Sprin-D and Prof. Dietmar Harhoff of the Max Planck Institute, a great tour de force through Europe’s own failures but also a message of concrete hope for our future.
I introduced the episode by saying “We see the Trump administration wielding resentment towards Europe for not burden-sharing enough, as a weapon to subdue and coerce Europe in multiple dimensions. But there’s also at the same time (and very much linked to that) a resurgence of pro-European pride, a growing desire for emancipation from our dependencies. EuroStack, which I’m associated with, is prominent pan-European movement which has grown at great speed, there is a big drive for digital sovereignty which is broad and growing”.
Rafael Laguna: “If the whole stack is not controlled by you, you’re in a losing game. We see how this is used to wield political power, as negotiating power… we’re never going to be completely independent…, but we have to have enough components. We have to have enough power at the table to be able to negotiate. We have ASML. Without ASML, there would be not a lot of negotiating power at the chips table… We have to work on all layers and create enough independence on all these layers. It’s totally possible from a technological perspective. But we have to switch into “do” mode. We all have the realization that this is the reality. We have the capabilities, people who know things, who can do things. Now we have to do things and that will need an orchestration between companies and governments. In the end it must be companies doing this; yet we see in the US and China the government is helping a great deal. We cannot wait for governments to do things, we should just start. But to scale, we need governments with innovative procurement, creating a sizable capital market for funds to be available to scale up – this needs to be orchestrated. And we’re now at due time, crunch time. We need to do things”.
Dietmar Harhoff further on pushing the State to support the private sector: “We have missed the boat on public sector procurement completely. The US has been able to use that, and moreover to hide it from the sight of our fellow economists who think that everything is done by the market over there. No, there’s very smart procurement policies in the Department of Defence, the Department of Energy and so forth. They partly feed startups and allow them to grow by giving them procurement contracts rather than subsidies. We need to move away from the subsidization philosophy we have in Europe to a philosophy of enabling private markets to come in and enabling the public sector to use smart procurement”.
Rafael: “We need to break the silos. We need to make it possible for professors to found companies, to work in these companies, take their PhDs and their intellectual property easily with them into their startups. We have to make sure that these startups get well funded. We have to make sure that the industry realizes that they’re stuck in an innovator’s dilemma. And the only way of breaking out of this is to work with a startup ecosystem, create alignment of interest.
Dietmar: “Not wasting more time is absolutely crucial. We cannot afford the slow processes, the encrusted structures, under which smart people in government are working. We need new processes. My call to the new German government was, folks, what gives us the chutzpah to say that by tossing a little bit more money into the same bureaucratic processes and procedures we have known not to work for 20 years will perform better in this legislature. They will not. We need to change how we do things. And Rafael is showing with his organization that speed is possible, and competition is not something that you need to neglect if you want to be fast.
…It’s all there. But we have to rattle the cages of bureaucrats and government officials who are in the mode of doing the same thing all over again. The house is on fire. The urgency has been perceived in most leadership circles. It has to come down now to the organizations. We have to rattle them into agency-like organizations like Sprin-D, enable them to be fast and agile, free them from unnecessary red tape. And we need to get the private sector moving faster”.
This last episode in particular is to me the key to it all. We are having a difficult time resetting our relationship with the US because the challenge is huge and we are just hoping this is a fever dream and a cuddly Biden-type will come back soon. So when the US is very openly using aggressive measures to get Europe to comply with the things it likes and does not like, we are lost within our principles and “we don’t do things in this way” – trade is trade, defence is defence, regulation is regulation, investment is investment, all nice and siloed, don’t mix things up. But the Trump’s Administration is mixing things up and we don’t know what in the world to do.
The one thing we can certainly do is reduce our dependencies in ways that may improve our agency but also our economic performance. This is the non-negotiable imperative. This is the message of 2025.