US Sidelined: European Tech Sovereignty Push Impacts Multiple Nations
China’s move to reduce technological dependence on the United States is now being followed by Europe. Through a new regulation titled the Cloud and AI Development Act (CADA), Europe is committed to enhancing technological sovereignty by boosting its domestic industry.
Technology and chips manufactured by US giants are planned to be replaced with technology and chips produced by European nations. This has immediately triggered reactions from trade organisations representing technology companies in Australia, Canada, and Japan.
The Australian Technology Council, the Canadian Trade and Investment Committee in the EU, the Japan New Economic Association, and the technology lobby group CCIA have issued warnings regarding the impact of Europe’s new regulations.
They assess that Europe’s new rules could hinder non-European technology companies from entering the region’s market.
This warning comes one week after the European Commission proposed new regulations to bolster the chip, AI, and cloud industries within the bloc, aiming for self-sufficiency and to reduce reliance on US giants such as Google and Microsoft.
Telecommunications ministers from EU member states are set to discuss the proposal this Tuesday (9/6). Subsequently, the regulation must be formulated alongside EU member states and the European Parliament in the coming months before it can become official law.
Trade groups from Australia, Canada, and Japan expressed concern regarding the proposed market access requirements for companies headquartered, owned, or controlled outside the European Union, stating that this would significantly affect their members’ participation in the European digital ecosystem.
“An approach that relies on vendor corporate structure, jurisdictional exposure, or geographical origin when determining eligibility—whether to provide cloud, AI, or software—could lead to unequal treatment of suppliers,” they stated in a joint letter to EU ministers, as reported by Reuters on Tuesday (9/6/2026).
They further assessed that Europe’s new regulations could reduce opportunities for trusted companies that have long invested in Europe’s digital development.
They warned that restricting customer choice regarding how services can be obtained or implemented could lead to inefficiencies, increased costs, and complicate cross-border business models.
“Therefore, we urge Member States and the European Parliament to ensure that CADA is revised in a manner that remains consistent with the principles of non-discrimination, proportionality, and openness to major trading partners,” they said.