The EU, tariffs and technological sovereignty
Despite the recent pause in the trade war unleashed by the US, the question of what tariff retaliation the European Union could implement without setting itself too high a bar remains open. Overall, the EU exports slightly more to the US than it imports from the US (in 2023, a positive surplus of 3% of total trade of €1.6 trillion). This surplus is explained by the fact that we sell more manufactured goods to the US than we buy. However, if we look at the services balance (which the White House has not taken into account when setting tariffs), we import €109 billion more than we export to the US (2023 data). So far, it seems that we Europeans are not in a very weak position.
However, it's important to keep in mind that international trade figures don't tell the whole story. For example, Apple, Dell, and HP are US companies, but they produce their computers, cell phones, and components in many countries, so these products don't count as US exports. Furthermore, it's important to keep in mind the technological level of what is being traded. To put it simply, we could say that the EU primarily sells 20th-century technologies to the US (pharmaceuticals, vehicles, and machinery). The US can afford to impose tariffs on the import of these products because they have sufficient technology to manufacture them themselves if the right economic incentives exist. The EU imports similar products from the US, which it could also produce itself if necessary; it also imports oil, gas, and agricultural products (which it could import from other countries if necessary); finally, it imports 21st century technologies, especially Information and communications technologies (ICT), for which it is more difficult to find suppliers within the EU or in third countries. China could certainly be an alternative ICT supplier, but it also has its drawbacks, and we are already heavily dependent on them for manufactured products.
We think of the paid equipment or software we use every day at home or at work: Apple, Android, and Windows phone and computer software, all the Microsoft tools (Office, Outlook, Teams, and others), cloud services (Amazon Web Services, Microsoft Azure, Google Cloud), video conferencing tools (Zoom, Webex, etc.), and many of them. If the European Union were to decide to impose substantial tariffs, the companies that make them would suffer a little, but European citizens and businesses would suffer just as much, if not more.
How can the EU reduce its dependence on the US in high technology, and specifically in ICT? Several years ago, various governments and administrations promoted the use of free software (Linux, OpenOffice). It was a good idea, but it didn't take root largely because it was difficult to compete with the usability, functionality, and reliability of software from large companies. It's worth noting that, in addition to free software, there are some interesting products in Europe, and especially in France, such as Mistral's LeChat (very similar to ChatGPT) or the Qwant search engine. So, what are we missing?
Faced with the possibility of some researchers leaving the US, many EU governments have announced public funding to attract them. If things go well, this will allow some postdocs European academics return to our countries. However, if we want to gain technological sovereignty, this is nowhere near enough. What is needed is to equip ourselves with large ICT companies, just as China itself did when it created its digital ecosystem in the 1990s. We should facilitate the creation of technology companies with access to the entire EU market, with a reduction in bureaucracy and regulations (as is already being proposed for moving to AI), with access to the other side of the Atlantic, and with an Anglo-Saxon risk culture. Governments, rather than providing subsidies, could help with their contracting capacity, preferably purchasing ICT products. Made in EuropeThis would allow these companies to offer sufficiently substantial compensation to attract and retain highly qualified personnel. It's important to keep in mind that the R&D offices of large American technology companies are paid an order of magnitude (10 times) more than in Europe. Just as we are able to attract the best soccer players, we should strive to attract the best technologists and engineers.
