Tech billionaire and owner of X, Elon Musk, is set to be right at President Donald Trump’s side in the new United States administration. Musk has emerged as one of Trump’s most trusted advisers, with the president-elect even appointing him to co-lead America’s new Department of Government Efficiency.

Now the duo is poised to introduce a new US tech agenda, ending regulatory constraints for US companies and promoting their interests abroad—including in the European Union. In doing so, they will attempt to shield X from European regulation on hate speech, online harm and disinformation, arguing that it curtails freedom of expression. It is now imperative that European decision-makers better understand—and prepare for—these future actions and their potential consequences.

The challenge: Trump and Musk are likely to test the EU’s ability to regulate online social media platforms

The European Commission and Musk-owned social media platform X have already engaged in a series of clashes: in July, the European Commission investigated X for breaching the EU Digital Services Act. Depending on the investigation’s outcome, the EU could impose a fine of up to 6% of X’s annual global turnover.

But Musk’s new political leverage could pressure the EU to prevent this. In October, Trump vowed to not let the EU ‘take advantage of our companies’ and vice-president elect J.D. Vance has also stated that the US could drop support for NATO if the EU further regulates X. As a result, the Trump administration could lobby European leaders to prevent the commission from punishing X.

Moreover, if the EU does impose the fine, Trump and Vance are likely to support Musk and denounce the fines as illegitimate. Musk could also use the platform itself to mobilise citizens and far-right parties to raise the political cost for EU decision-makers pursuing the crackdown.

The solution: The EU must apply its regulatory laws to X and minimise friction with Trump—or succumb to political pressure

Musk wants to portray X as a ‘safe space’ for free speech and frame EU counter-disinformation policies as censorship. However, the US and the EU have different understandings and legal traditions concerning freedom of expression, including on privacy. In the US, platforms are largely not liable for content posted by users; but in Europe, both EU-level and national legislation allows for restrictions on hate speech targeting vulnerable minorities and can make platforms liable if they do not remove illegal, violent or disinformation-related content. This is especially applicable to content related to foreign information manipulation and interference.

Europeans should therefore defend the obligation of X and other social media platforms to abide by EU legislation, including supporting the removal of deceitful accounts and forcing transparency in advertisement practices. The EU must demonstrate that it is not fixated on attacking Musk or US companies specifically; but on protecting election and information integrity, no matter its provenance, and ensuring overall compliance with the Digital Services Act.

This is especially vital given the scrutiny over Chinese-owned TikTok’s role in Romania’s presidential election. The EU’s focus on such cases can help dispel the idea that the EU is only targeting US companies.

The challenge: Trump and Musk are likely to reject AI and digital-governance cooperation with the EU, and undermine multilateral governance efforts

Trump is expected to discontinue or significantly undermine AI and digital collaboration forums such as the EU-US Trade and Technology Council, the OECD’s work on technology governance, and the G7’s Hiroshima Process on AI. The president-elect has also vowed to repeal and replace the Executive Order on AI adopted by Joe Biden’s administration—which, according to the Republican party, could hinder AI innovation in the US.

Since the US views AI through the lens of competition with China, it is likely that Trump will apply even more political pressure on the EU than the Biden administration has on AI export controls vis-à-vis China. While Musk has previously advocated for AI regulation, his recent founding and investment in xAI means he is now a participant in the race to build faster and better AI models. As such, Musk is likely to further align with Trump on such issues.

The solution: European decision-makers should continue pursuing international cooperation on AI

Fragmentation in AI regulation may work for the US and US companies. But the EU now needs to continue working multilaterally to set common standards in AI and digital technologies. This includes via UN-led processes and bodies; through collaboration with regional institutions and processes such as the OECD, the EU-Latin America and Caribbean Digital Alliance or the African Union; and bilateral digital agreements with strategic partners such as Brazil, India, or Japan.

France’s upcoming AI Action Summit is a prime opportunity for the EU to find such partners and kick-start a parallel process of AI collaboration. It would be challenging for the US government and US-based companies to ignore the global adoption of common standards, which may incentivise them to continue cooperating with the EU on establishing international rules for AI governance. EU leaders could also play on heightened US interest in the bloc’s policy on curbing tech sales to China, in order to strike deals on transatlantic AI regulation.

In dealing with Trump and Musk, the EU should neither rule out striking tech deals, nor fear standing up for its  interests and values in digital governance. For example, Europeans could give into pressure from the new US leadership to curb sales of European chip equipment to China in return for advancements in online social media platform regulation or investment in the G7 Hiroshima Process.

The challenge: Trump and Musk’s tech agenda will generate opportunities which Europeans must seize

Νot all US tech companies have the same agenda; X’s clashes with European regulation are exceptional. Trump has typically not bought into Silicon Valley values and has targeted Apple, Microsoft, and Meta because of their alleged leanings towards the Democratic party. Indeed, most US companies operate smoothly in the EU market and—even if they have their own views on EU regulation—remain interested in investing and making money in the EU. As such, they are unlikely to join an openly anti-EU agenda.

Moreover, Trump’s policies may alienate burgeoning tech talent within these companies or at American universities. Europeans should not remain defensive, but instead seize these opportunities to attract much-needed talent and investment in their own companies.

The solution: The EU should develop policies to attract global tech talent, investments and partners 

EU-based tech companies could attract talent alienated by Trump’s leadership, and individuals facing high rates of visa denials and long processing times, via a ‘tech talent visa’. The EU will then become an attractive global destination for this demographic to develop and build innovative products.

The EU could also attract further investment in semiconductor manufacturing as Trump continues to express his opposition to the US CHIPS act. Finally, the EU could approach alienated third countries, which—through pressure from Trump—have forgone their Chinese digital infrastructure via the first Trump administration’s ‘Clean Network’ initiative. Instead, the EU could promote its Global Gateway as a ‘third way’ of digital transformation for partner countries and advance its own values on digital technologies.   

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For Europeans, the Trump and Musk duo will present various challenges in technology. The EU must develops a digital grand strategy to connect the dots between its internal digital policy and its foreign policy to fulfill its strategic objectives. At the same time, European decision-makers should not lose sight of the opportunities that the new US tech agenda could create, including attracting talent and investment in semiconductors.

But the Trump presidency also offers the chance for Europeans to stand alone in their approach to developing digital technologies. The changing conditions for global governance means the EU can truly take advantage of the opportunities that these present and secure a more streamlined—and regulated—digital future.