US threatens EU with devastating retaliation if Brussels curbs Starlink spectrum access

The warning adds a fresh transatlantic trade risk to a market that had largely treated EU digital regulation as a compliance issue rather than a trigger for US countermeasures. European exporters with heavy US revenue exposure are the most obvious channel if rhetoric turns into action, while EU satellite and telecom operators that would benefit from reserved spectrum now face a more contested path to that advantage. For the euro, a renewed tit-for-tat narrative is a modest headwind at the margin, though nothing concrete has been announced. Investors will look for whether Washington links tech regulation to broader tariff policy, which would raise the stakes well beyond the satellite sector.

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Washington is signalling that Europe’s quest for tech independence, from satellite airwaves to cloud rules and big-tech fines, could come with a bill payable in the American market.

Summary:

• US ambassador to the EU Andrew Puzder warned European companies could face severe retaliation in the US market if Brussels limits American rivals’ access to parts of the EU market, Financial Times (gated) reports
• The trigger is a Commission proposal to reserve some direct satellite-to-smartphone spectrum for European operators, curbing access for US and Chinese firms including SpaceX’s Starlink
• SpaceX has warned the plan could weaken connectivity in Ukraine, where Starlink supports civilian and military communications
• Puzder also criticised the proposed Cloud and AI Development Act and questioned whether Digital Markets Act fines are about competition or revenue
• He urged the EU to cooperate with the US against China on AI and quantum computing rather than restrict US firms
• The Commission says its proposal diversifies EU suppliers while staying open to non-EU operators

Washington’s envoy to the European Union has put Brussels on notice that European businesses could pay a heavy price in the American market if the bloc moves to shut US satellite operators out of part of its airwaves, sharpening a transatlantic dispute over who controls Europe’s critical technology.

The flashpoint is a European Commission proposal, tabled this year, to set aside a slice of the spectrum used for direct satellite-to-smartphone connections for European operators. That would shrink the frequencies available to American and Chinese providers, including SpaceX and its Starlink network.

Andrew Puzder, the US ambassador to the EU, told the Financial Times that European firms should be alert to the possibility of retaliation, and suggested the consequences would be severe given how much those companies depend on access to the large US market.

He accepted that Europe has a legitimate interest in safeguarding sensitive government data, but argued that rules designed to weaken American competitors in order to lift domestic ones would not make European industry stronger. US products in the sector were reliable and trusted, he said, adding that Europe did not need what he called “synchronised mediocrity”.

SpaceX has already objected strongly to the spectrum plan, warning that it could degrade connectivity in Ukraine, where Starlink has carried both civilian and military communications since Russia launched its full-scale invasion.

The proposal sits within a wider European drive for technological sovereignty, as policymakers look to reduce reliance on US technology amid concern over the unpredictability of President Donald Trump and the risks of foreign control over critical infrastructure. The Commission has also put forward a Cloud and AI Development Act that would set sovereignty conditions for providers of sensitive cloud services while helping European firms grow into alternatives to US groups.

Puzder also questioned the EU’s enforcement of the Digital Markets Act, asking whether multibillion-euro fines on American technology companies were really about competition or about raising revenue for Europe. He argued that the regulatory approach risked deterring US investment and undermining Europe’s own tech ambitions.

Rather than trying to rein in American firms, he said, Washington and Brussels should cooperate to stay ahead of China in artificial intelligence and quantum computing, echoing Trump’s view that losing that contest would be the worst outcome.

The Commission, for its part, has defended the spectrum proposal, saying it encourages new entrants and more diverse EU suppliers while remaining open to operators from outside the bloc. How Brussels proceeds with the plan, and with its wider sovereignty agenda, will now be watched for signs of whether this dispute moves from rhetoric toward trade measures.