• USTR's Jamieson Greer signals potential Section 301 investigations targeting EU tech rules like the Digital Markets Act (DMA), citing discrimination against US firms.
  • The warning follows USTR condemnation of EU taxes, fines, and directives as "discriminatory and harassing," with threats of countermeasures including fees or restrictions on EU services.
  • Escalation risks disrupting transatlantic trade amid ongoing EU enforcement against US tech giants, with broader implications for the $2+ trillion global digital services sector.

In a CNBC interview that aired Thursday morning, USTR official Jamieson Greer pointed to Section 301 of the Trade Act of 1974 as a possible tool to address what Washington views as discriminatory EU tech regulations. The comments come amid heightened tensions over rules like the DMA, which designates US giants including Apple (AAPL), Google (GOOGL), Meta (META), and Amazon (AMZN) for ex-ante oversight.

"We're seeing a pattern of measures that appear to target US companies specifically," Greer said, according to people familiar with the interview. "Section 301 gives us the authority to investigate and respond to unfair practices." USTR recently issued a statement condemning EU actions as "discriminatory and harassing" and warning of potential retaliation if Brussels persists with fines and directives affecting US tech firms.

Efforts to resolve the dispute through diplomacy have hit a snag, with a US-UK "tech prosperity deal" paused over similar barriers including digital taxes. Without a breakthrough, the US could launch a Section 301 probe as an initial step, mirroring past uses against French digital taxes that led to tariff threats before negotiations. The EU, meanwhile, maintains its rules ensure a "safe, fair, and level playing field" for all firms operating in its market.

Industry sources note that EU tech rules primarily impact large US tech companies, potentially raising costs and limiting market access. US service providers face barriers while EU firms enjoy broad access to the US market, according to USTR data. This imbalance has drawn bipartisan criticism in Congress, where hearings have labeled EU overregulation as "anti-American" and even "hybrid warfare" against US interests.

Behind the scenes, EU leaders are balancing domestic demands for stricter tech regulation with alliance needs against geopolitical rivals like China and Russia. The so-called "Brussels Effect," where EU regulations like the DMA spread globally, has prompted copycat laws in South Korea and elsewhere, further complicating US competitiveness. A Section 301 move would signal Washington's opposition to this trend, potentially straining EU-US ties despite joint statements on trade cooperation.

Market watchers are bracing for short-term volatility. "If this escalates, we could see tariffs that disrupt digital trade flows," said one analyst who requested anonymity due to the sensitivity of the matter. Long-term, the standoff might fragment digital trade rules, though some experts predict pressure could deter other countries from mimicking EU regulations. Attempts to reach EU officials for comment on the latest developments were unsuccessful as of press time.

Correction: An earlier version of this article misstated the timing of the CNBC interview; it aired Thursday morning, not Wednesday.