Geopolitical fragility is turning US–EU technology cooperation from mainly a commercial relationship into a project of security, resilience and digital sovereignty. The two sides coordinate through the EU–US Trade and Technology Council (TTC), but also pursue domestic industrial policies and scrutinize dependencies in semiconductors, software and cloud services.
Why technology cooperation has become a security issue
Technology supply chains cross borders, but the capabilities they support—from advanced computing to communications—can have strategic as well as commercial value. That creates a tension: governments want open, efficient markets, yet they also want to limit security risks and avoid being vulnerable to supply disruptions or political pressure.
NATO’s 2025 report on geo-economic fragmentation treats concentrated strategic supply chains as a potential military vulnerability and recommends stronger export-control mechanisms. In this view, economic security is part of security planning: dependence on a small number of suppliers can matter when a crisis, coercive policy or disruption affects access to critical technology.
How the EU and United States coordinate
The Trade and Technology Council
The EU–US Trade and Technology Council is the central bilateral forum for coordinating approaches to trade and technology. The European Commission describes its purpose as deepening transatlantic economic relations around shared democratic values. Its work includes artificial intelligence, semiconductors, export controls, digital identity and standards.
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That agenda matters because policy in one area can affect the others. Export controls can restrict access to technology; standards and digital-identity coordination can make cross-border systems easier to use; and semiconductor policy can influence where capacity is built. TTC documents show efforts to coordinate controls and develop shared principles, though coordination does not remove every difference in national policy or regulation.
Coordination is not the same as a single policy
The TTC provides a venue for consultation, but the EU and United States also make domestic policy choices. The resulting challenge is to protect security and build resilience without unnecessarily fragmenting allied markets. If rules diverge, companies may face added compliance work or uncertainty about which products, customers or transfers are permitted.
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Why semiconductors are a geopolitical chokepoint
Advanced chips are a particularly exposed part of the ecosystem because production is geographically concentrated. A 2025 European Parliament study reports that TSMC controls more than 90% of global cutting-edge semiconductor production, while Europe produces less than 10%. Those figures refer to cutting-edge production, not every type of chip.
Concentration can make a supply chain efficient in ordinary conditions, but it leaves customers with fewer alternatives if production or access is disrupted. The same concentration gives semiconductor policy geopolitical weight: decisions about exports, investment or access can affect both commercial markets and security capabilities.
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Export controls protect security but can reshape markets
Controls on advanced chips and dual-use technologies are intended to address security concerns. They can also reduce market access, complicate business planning and encourage the development of parallel supply chains. TTC work on control coordination and shared principles is an attempt to manage those effects among allies; it cannot eliminate the underlying trade-off between restricting sensitive technology and preserving open markets.
Industrial policy aims to build capacity
The EU Chips Act and related initiatives seek to expand production, research and infrastructure so Europe is less exposed to external shocks. The European Commission reported €3.7 billion invested in five semiconductor pilot lines in 2025, including work relevant to defense applications. Pilot-line investment supports development and manufacturing capabilities; the figure alone does not establish how quickly Europe can change its share of cutting-edge production.
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What dependence on US software and cloud means for Europe
A 2025 European Parliament study says Europe’s digital ecosystem remains heavily dependent on non-EU software and cloud providers, with US firms dominating major software layers. The study frames this concentration as a strategic vulnerability, not simply a question of where a provider is headquartered.
Dependence can create exposure to foreign legal regimes, service outages, sanctions or strategic leverage. It can also make it harder to change providers if data, applications and operating processes are tied to one supplier’s technology. These are risks to assess, not proof that a particular provider will interrupt service or that every service presents the same level of exposure.
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For organizations choosing or relying on digital services, the practical question is therefore not only whether a provider is European or American. It is also how critical the service is, how difficult it would be to replace, what continuity arrangements exist, and whether the organization can maintain operations if access changes. Sovereignty and resilience policies seek to reduce dependence, while interoperability remains important for working across allied markets.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.The main policy trade-offs
| Policy tension | What it favors | What it can cost |
|---|---|---|
| Resilience versus efficiency | More alternatives and capacity can reduce exposure to concentrated supply chains. | Building or maintaining alternatives can be less efficient than relying on established suppliers. |
| Sovereignty versus interoperability | Greater local control can reduce reliance on external providers. | Less interoperability can make cross-border use and cooperation harder. |
| Security controls versus market access | Export controls can restrict access to sensitive or dual-use technologies. | Restrictions can constrain allied commerce and encourage parallel supply chains. |
| National industrial policy versus allied coordination | Domestic investment can strengthen local capacity. | Uncoordinated approaches can fragment markets; coordination must still accommodate national security priorities. |
These tensions explain why there is no simple choice between dependence and self-sufficiency. A strategy focused only on efficiency may leave critical capabilities concentrated; a strategy focused only on autonomy may weaken interoperability or raise the cost of participation in shared markets.
What to watch in the transatlantic relationship
- TTC follow-through: Whether coordination on AI, semiconductors, export controls, digital identity and standards produces durable common approaches.
- Export-control alignment: Whether allied controls protect security objectives while avoiding avoidable disruptions to legitimate market access.
- Semiconductor capacity: Whether European investment in pilot lines and related infrastructure strengthens resilience in practice, rather than only signaling intent.
- Software and cloud alternatives: Whether organizations and governments can reduce critical dependencies without sacrificing needed interoperability.
- Supply-chain concentration: Whether governments treat concentrated dependencies as manageable commercial risks or as vulnerabilities requiring coordinated action.
The cited EU, US and NATO materials establish the mechanisms and policy pressures shaping the relationship, but they do not provide one agreed quantitative forecast for how the transatlantic technology ecosystem will evolve. Its direction will depend on whether security coordination, investment and interoperability can advance together.
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