US warns EU that Starlink spectrum limits could trigger retaliation

A fresh transatlantic trade risk now hangs over a market that had mostly viewed EU digital rulemaking as a compliance matter rather than something that would provoke US action. If the tough talk hardens into measures, European exporters that earn a large part of their revenue in the US are the clearest transmission channel; at the same time, EU satellite and telecom companies hoping to benefit from reserved spectrum would have a harder path to that gain. For the euro, another round of retaliation rhetoric is only a slight drag at the margin, with no concrete steps yet announced. Investors will be watching for any attempt by Washington to connect tech regulation with broader tariff policy, which would broaden the conflict well beyond the satellite sector.

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The message from Washington is that Europe's push for technological independence — covering satellite spectrum, cloud regulations and fines on big tech — may end up carrying a price in the US market.

Summary:

• Andrew Puzder, the US ambassador to the EU, cautioned that European companies could face heavy retaliation in the US market should Brussels restrict American rivals' access to parts of the EU market, according to the Financial Times (gated)
• The dispute centres on a Commission proposal to reserve part of the direct satellite-to-smartphone spectrum for European operators, cutting access for US and Chinese firms including SpaceX's Starlink
• SpaceX has cautioned that the proposal could degrade connectivity in Ukraine, where Starlink carries civilian and military communications
• Puzder also criticised the proposed Cloud and AI Development Act and asked whether Digital Markets Act fines are aimed at competition or revenue
• He pressed the EU to cooperate with Washington against China on AI and quantum computing instead of restricting US firms
• The Commission says its plan would diversify EU suppliers while leaving room for non-EU operators

The US envoy to the EU has warned that European businesses could pay dearly in the American market if the bloc attempts to bar US satellite operators from part of its airwaves, intensifying an across-the-Atlantic fight over control of Europe's critical technology.

At issue is a European Commission proposal brought forward this year that would carve out a portion of the frequencies used for direct satellite-to-smartphone links for European operators. The move would narrow the spectrum on offer to US and Chinese suppliers, among them SpaceX and its Starlink network.

In an interview with the Financial Times, US ambassador to the EU Andrew Puzder said European companies should be prepared for possible retaliation, and suggested the consequences would be severe given those companies' dependence on access to the large US market.

Puzder acknowledged that Europe was right to protect sensitive government data, but said measures intended to weaken US rivals and boost domestic players would not strengthen European industry. He described US products in that sector as dependable and trusted, and said Europe did not need what he termed “synchronised mediocrity”.

SpaceX has fiercely opposed the spectrum proposal, saying it could hurt connectivity in Ukraine, where Starlink has supported civilian and military communications since Russia's full-scale invasion began.

The spectrum plan is part of a broader European effort to achieve technological sovereignty, with policy makers wanting to cut dependence on US technology at a time when President Donald Trump's unpredictability and concerns about foreign control over critical infrastructure are high. A Cloud and AI Development Act has also been proposed by the Commission, imposing sovereignty requirements on providers of sensitive cloud services while seeking to help European companies develop as alternatives to their US counterparts.

The ambassador also cast doubt on how the EU enforces its Digital Markets Act, asking if the multibillion-euro fines imposed on American technology companies are genuinely about competition or simply a way to generate European revenue. Such regulation, he argued, could scare off American investment and undercut Europe's own technological goals.

Instead of constraining US companies, he said, Washington and Brussels ought to work together to outpace China in AI and quantum computing — a sentiment that matches Trump's position that falling behind in that race would be the worst result.

For its part, the Commission has defended the plan, arguing that it would bring in new entrants and a wider range of EU suppliers while keeping the door open to non-EU operators. Whether Brussels presses ahead with the proposal and its broader sovereignty programme will now be closely watched to see if the standoff shifts from words to trade measures.