U.S.–EU Steel Tariffs Hinge on Tech Rule Negotiations: What’s at Stake?

Steel Tariffs and Tech Rules: The New Frontline in U.S.–EU Trade

In the latest chapter of the U.S.–EU steel tariff saga, a new twist has emerged: American officials have made clear that any relief on steel and aluminum tariffs will be contingent on the European Union rolling back some of its strict regulations on major U.S. tech companies. This direct linkage has thrown both sides into a complicated negotiation, blending industrial policy with the future of digital markets.

Inside the Brussels Talks: Linking Metals to Digital Markets

On Monday, U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer landed in Brussels for their first official visit since a July trade deal. That agreement set a 15% U.S. tariff on many EU goods, while the EU pledged to erase tariffs on U.S. industrial products and some agricultural items. Both sides also committed to further negotiations on other tariffs, including the steep 50% levies on steel and aluminum. Notably, the EU responded to Washington’s broadening of steel tariffs by matching the 50% rate on imports exceeding set quotas.

But this time, the conversation veered into new territory. Lutnick told Bloomberg Television that the U.S. wants the EU to roll back digital regulations in exchange for a deal on metals tariffs. The ask is clear: loosen the rules governing American tech giants, and the U.S. will consider lowering its punishing tariffs on European steel and aluminum.

EU’s Regulatory Framework: Sticking Points and Economic Pressures

For the EU, the request is fraught with tension. The bloc has been steadfast in its position: it will not let external powers dictate its tech policies, especially those enshrined in the Digital Services Act and the Digital Markets Act. These regulations, which govern online platforms and marketplaces, are designed to protect consumers and foster fair competition. But to U.S. officials, the rules — and the hefty fines that sometimes accompany them — seem to disproportionately target American firms.

EU technology chief Henna Virkkunen, meeting with Lutnick and Greer, underscored the importance of these rulebooks, while also mentioning recent proposals to reduce bureaucracy around AI and data protection. Yet, at a midday briefing, European Commission spokesperson Thomas Regnier reiterated that the bloc’s tech and tax rules are off the table in trade negotiations. “Yes, this is absolutely still the case,” Regnier said.

Meanwhile, the economic consequences of the tariffs are mounting. German Economy Minister Katherina Reiche noted that many EU-made machines cannot be delivered to the U.S., causing significant drops in sales and straining European manufacturers. The pressure is real: steel and aluminum tariffs are biting, and relief is desperately needed.

American Concerns: Fair Play or Protectionism?

The Trump administration and its officials have long argued that the EU’s regulatory environment is unfair to American tech companies. Lutnick cited large fines, such as the nearly €3 billion penalty facing Google, as evidence of aggressive enforcement. Trade Representative Greer echoed these concerns, noting that compliance thresholds often capture U.S. firms and that enforcement can be “quite aggressive at times.” The U.S. position is that if the EU wants tariff relief, it must also make its digital marketplace more inviting to American companies.

Lutnick put it bluntly: “If they take the foot off this regulatory framework and make it more inviting for our companies, they can get the benefit of hundreds of billions, possibly $1 trillion of investment.” The message is clear — the U.S. is offering economic opportunity, but only if its tech giants are welcomed on fair terms.

Negotiation Deadlock: Who Will Blink First?

So far, the EU has not budged. Trade chief Maros Sefcovic told reporters he wanted to reassure Lutnick that the digital rules “are not discriminatory” and “not aimed at U.S. companies.” He suggested that the EU simply needs to communicate its intentions better. But Greer pushed back, saying the rules’ thresholds and aggressive enforcement amount to de facto discrimination.

As the talks continue, both sides are digging in. The EU is unwilling to compromise its regulatory autonomy, while the U.S. insists that any metals deal must come with digital market concessions. The impasse is emblematic of a broader shift in global trade — where the boundaries between traditional goods and digital services are increasingly blurred, and where economic leverage is wielded across sectors.

What’s Next for Transatlantic Trade?

The stakes are high. European manufacturers are feeling the pain of lost sales and rising costs, while American tech companies remain wary of hefty EU fines and complex compliance regimes. Both sides risk economic harm if negotiations stall, but neither wants to be seen as conceding core principles.

Ultimately, the outcome of these negotiations could reshape the landscape of U.S.–EU commerce for years to come. If the two sides find a way to bridge their differences — perhaps by tweaking tech rules or crafting targeted tariff exemptions — it could unlock new investment and revive growth. If not, the dispute may deepen, with both economies suffering the consequences.

Analysis: The U.S.–EU steel tariff dispute now sits at the crossroads of digital regulation and industrial policy. By tying tariff relief to tech rule changes, American negotiators are raising the stakes and forcing the EU to weigh economic pain against regulatory sovereignty. The outcome will not only determine the flow of steel and aluminum, but also the future of transatlantic digital markets — a story that could set the tone for global trade in the years ahead.