The European Union’s efforts to defend its landmark digital regulations have become a sticking point in finalizing a joint trade statement with the United States, according to a Financial Times report cited by CNBC.
The EU and U.S. had reached a trade deal in July that was supposed to ease tensions, avert a full-scale trade war, and cut tariffs on European goods. However, the official joint statement that would formalize the agreement has been delayed. EU officials told the Financial Times that the primary obstacle is disagreement over language concerning “non-tariff barriers,” which Washington has interpreted to include the bloc’s strict digital rules.
At the heart of the dispute is the EU’s Digital Services Act (DSA), a sweeping piece of legislation requiring major tech companies to remove illegal content and take stronger responsibility for harmful online material, such as hate speech and child sexual abuse content. The law is seen in Brussels as essential to ensuring a safer, fairer online space. But U.S. officials argue that the DSA imposes costly compliance requirements and restricts free expression, with American tech firms among the most affected.
According to CNBC, citing the Financial Times, Washington has sought to keep open the possibility of concessions on the DSA in the trade talks. The European Commission, however, has insisted that weakening the legislation is a red line it will not cross.
The July deal, announced by European Commission President Ursula von der Leyen and U.S. President Donald Trump, slashed tariffs on most EU goods to 15 percent — half the initially threatened rate. The agreement was hailed at the time as a breakthrough that prevented escalating economic conflict between the two trading partners, who together account for nearly one-third of global commerce.
CNBC, referencing the FT report, added that Brussels had expected Trump to sign an executive order by 15 August to cut U.S. tariffs on EU car exports from 27.5 percent to 15 percent. However, a U.S. official suggested this move would be postponed until the joint statement is finalized, leaving automakers and other industries in limbo.