U.S. officials link steel and aluminium tariff cuts to softer regulation of digital giants — Brussels balks at tying trade relief to tech‑policy concessions.

As transatlantic trade tensions sharpen, Washington is pressing the European Commission and the wider European Union (EU) to dial back their regulatory regime for large U.S. technology firms — in return for meaningful relief on steel and aluminium tariffs. The move, unveiled at a meeting in Brussels, has stirred fresh unease within European capitals, where regulators and industry alike are wary of linking industrial‑hardware concessions with digital‑policy shifts.

A diplomatic double‑header

In late November, U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer sat down with EU trade ministers for what one diplomat described as an “open and direct” discussion. The U.S. side reiterated that tariff relief on steel and aluminium would depend on the EU first delivering what Washington calls “balanced” digital regulation. The departments headed by Lutnick and Greer are pressing Brussels not simply to amend the substance of regulations such as the Digital Markets Act (DMA) and the Digital Services Act (DSA) — but to reconsider how aggressively they are enforced against large tech platforms, especially U.S.-based conglomerates.

The metal side of the bargain

The pressing context is the steel and aluminium tariffs imposed by the U.S., which remain stuck at high levels despite a trade framework announced this past summer. U.S. officials argue that unless the EU takes action in the digital sphere, the metal duties will remain unresolved. European industry is keen to see tariff relief — especially producers and exporters of finished metal goods — but Brussels is reluctant to exchange long‑standing regulatory priorities for short‑term trade gains.

Tech regulation meets trade diplomacy

For Washington, the message is clear: “If you relax enforcement, then we’ll talk steel.” In Brussels, however, it is framed differently: European regulators maintain that the DMA and DSA are not aimed at U.S. companies — but apply equally to all platforms active in the single market. Trade Commissioner Maroš Šefčovič recently insisted these laws are non‑discriminatory.

Behind the scenes, U.S. officials have pointed to large cases against firms such as Google LLC, Microsoft Corporation and Amazon .com, Inc., arguing that the pace and scope of enforcement create a competitive disadvantage for American platforms globally.

Why the U.S. is pushing now

The timing is no accident. Having struck a trade framework this summer (in which the U.S. capped many tariffs at 15 % and the EU offered relief on industrial goods), Washington now wants to move from framework to implementation. Meanwhile, U.S. tech firms are lobbying intensively for regulatory concessions abroad, and the U.S. sees linking these issues to steel tariffs as leverage.

Moreover, the U.S. argues that if enforcement burdens on tech firms are reduced, significant investment — potentially in the high‑hundreds of billions of dollars — could flow into Europe. Lutnick referenced a possible “$1 trillion” investment wind‑up if regulatory clarity were improved.

European resistance and risks

Yet Brussels is pushing back. EU officials caution that tying digital regulation to a trade deal undermines the principle of regulatory sovereignty: the EU developed the DMA and DSA specifically to address market dominance and digital‑services risks. To accede under pressure risks political backlash. The European Parliament and several member states remain sceptical of making concessions to the U.S. in return for tariff relief.

Furthermore, the EU fears that accepting linkage between regulation and trade could set a precedent: future deals might similarly demand regulatory concessions in other areas (data protection, AI oversight, sustainability).

What’s next?

Negotiations now shift into implementation mode. Brussels must decide whether to open a formal dialogue on regulatory easing — and if so, how much it will accommodate without undermining its policy agenda. Meanwhile, Washington will be watching closely whether the EU signals willingness. If such signals appear, tariff relief discussions could proceed. If not, the stalemate may persist — leaving steel and aluminium producers in limbo, and tech companies waiting for breakthroughs.

Broader implications

The transatlantic link between digital regulation and trade access is itself noteworthy. It marks a new model of leverage: instead of purely negotiating tariffs and quotas, trade is now directly tied to regulatory posture in sensitive sectors. Should Brussels acquiesce, we may see a shift in how tech regulation is treated in future trade deals not only with the U.S., but globally.

It also raises questions for European digital sovereignty, competitive fairness, and the global role of U.S. platforms. If Brussels loosens rules for the sake of trade, will that prompt a race to the bottom — or will the EU maintain its regulatory ambition while securing access?