Trump Administration’s Real Agenda for the European Union
The explicit goal of the new US administration is to protect the US tech industry and to dismantle European regulations, reverting to bilateral arrangements where the strongest naturally prevails. A commentary by Lorenzo Bini Smaghi
The diverse reactions in Europe to US Vice President JD Vance’s speech at the Munich Security Conference last February reveal how poorly Europe has grasped the intentions of America’s new administration.
What has been missed, in particular, is Trump's approach of subordinating politics—in all its facets, from defence and diplomacy to public institutions and regulation—to economic interests. This is the defining characteristic of American populism.
Most observers were shocked by Vance’s accusations against European nations for curtailing freedom of speech. But those accusations were merely a provocative smokescreen.
This is not just because Vance's examples were marginal and partly inaccurate but primarily because the new administration itself shows scant interest in civil rights—even domestically.
This was evident during Trump’s recent White House meeting with British Prime Minister Keir Starmer, at which Vance was also present. When asked by reporters to clarify his remarks from Munich, Vance explained his criticism was aimed less at the UK's treatment of its citizens and more at “the impact on American tech companies—and thus, by extension, on American citizens.”
Starmer’s response, defending Britain's “great tradition of free speech,” showed he had missed the point entirely.
For the new administration, the key priority is corporate freedom—the fundamental tool for strengthening American tech giants not just domestically but also internationally.
Access to markets—ideally with minimal regulation and taxation—is essential for America’s tech champions to extend their global dominance.
Peter Thiel, one of Silicon Valley’s founders, explains this clearly in his book, Zero to One (2014), arguing that monopolies alone can foster innovation and sustained growth, while competition ultimately destroys companies.
The stock market valuations of tech monopolies rely less on current profits than future earnings, which hinge on access to new markets.
This is exactly what has unfolded in recent years. The entire outperformance of the US stock market relative to Europe over the past decade is attributable solely to America's "Magnificent Seven" tech firms—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Excluding these, Wall Street's performance has not exceeded Europe's.
The Tense Relations with the EU
In other words, American economic supremacy depends almost exclusively on the success of its technology companies—and increased public debt. This clarifies why the tech sector is the administration's top priority.
It also explains domestic decisions, such as curtailing the autonomy of regulatory agencies—including antitrust and financial market authorities—to bring them under tighter political control.
It further clarifies hostility toward the European Union, which is wealthy but heavily regulated.
EU regulations prioritizing privacy and data ownership rights represent significant barriers to US tech firms’ growth.
Similarly problematic for the new administration is Europe's coordinated tax policy, which limits multinationals' ability to select jurisdictions that minimize their tax liabilities.
The explicit goal of the new US administration is to dismantle European regulations, reverting to bilateral arrangements where the strongest naturally prevails.
Yet, this approach is fragile. By aligning politics with a single sector’s interests, the administration risks sudden shifts in public sentiment, particularly amid unexpected financial market reversals.
Historical experience indicates that whenever there is an extreme misalignment between tech sector valuations and the broader economy, markets correct sharply, triggering contagion across the global economy.
Given current equity market levels, there is little room for complacency.
A first version of this article was published in the Italian daily Il Foglio
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
