Vance tells Paris summit Europe must lighten AI regulation as tariffs hit steel

US Vice President JD Vance stood before the Artificial Intelligence Action Summit in Paris on Tuesday and delivered a blunt message: Europe's regulatory architecture for technology is strangling the very innovation it claims to oversee. His speech, the first major overseas appearance of his vice presidency, framed the EU's Digital Markets Act and Digital Services Act as protectionist barriers disguised as consumer protection, and warned that premature restriction of artificial intelligence would paralyse a generational opportunity.

A deregulatory pitch in the heart of Brussels' rulebook

Vance's language was calibrated for the room. European Commission President Ursula von der Leyen sat in the audience as he described the DMA and DSA as "onerous international rules" that have created unnecessary hurdles for American businesses. The vice president argued that restricting AI development now would "unfairly benefit incumbents in the space" and mean "paralyzing one of the most promising technologies we have seen in generations." He called instead for "international regulatory regimes that foster creation" and said he welcomed the "deregulatory flavor making its way into a lot of conversations" at the summit.

The critique was not new. US technology companies have lobbied against the Digital Markets Act since its proposal, arguing its gatekeeper designations target American firms disproportionately. The Digital Services Act has drawn similar fire for its content moderation obligations. What changed on Tuesday was the messenger: a sitting vice president, on his inaugural foreign trip, using a European-hosted forum to demand the bloc unwind its own legislation.

Tariffs land as the vice president speaks

Hours before Vance took the stage, Donald Trump signed proclamations imposing 25 percent tariffs on all steel and aluminium entering the United States. The measures took effect immediately and cover European producers who exported roughly €5.2 billion of steel and €1.3 billion of aluminium to the US in 2023, according to Eurostat trade data. Von der Leyen responded within hours, calling the tariffs "unjustified" and vowing they "will not go unanswered." The Commission is expected to reinstate countermeasures suspended under the 2021 truce, targeting US goods from bourbon to motorcycles.

The timing was not coincidental. Trade leverage and technology policy have been intertwined since the first Trump administration threatened auto tariffs to extract concessions on digital taxes. Vance's speech doubled as a signal: the White House expects regulatory concessions alongside any trade negotiation. Whether the EU separates the two tracks remains the central question for the von der Leyen, Vance meeting scheduled for later Tuesday in Paris.

China framed as the adversary in AI supply chains

Vance devoted a substantial section of his remarks to China, describing "hostile foreign adversaries" that are "weaponizing" AI software to rewrite history and censor speech. He referenced CCTV surveillance networks and 5G equipment as examples of "cheap tech in the marketplace that's been heavily subsidized and exported by authoritarian regimes." The Silicon Valley adage he quoted, "if you aren't paying for the product, you are the product", was directed squarely at Chinese AI offerings such as the DeepSeek chatbot released last month, which claimed performance comparable to US models at a fraction of the training cost.

The rivalry intensified in January when Trump announced a $500 billion private-sector AI investment plan centred on data centres, energy infrastructure and semiconductor manufacturing. DeepSeek's release days later unsettled markets, wiping nearly $600 billion from Nvidia's market capitalisation in a single session. Vance's framing suggests the administration views Chinese cost advantages not as competitive efficiency but as state-subsidised dumping with strategic intent.

EU tech chief concedes ground on innovation tone

Henna Virkkunen, the commissioner responsible for digital policy, met reporters before Vance's speech and struck a conciliatory note. She insisted the DMA and DSA are fair because they apply equally to every company meeting the thresholds, regardless of nationality. But she acknowledged the criticism and promised a more "innovation-friendly" AI regulatory framework. The concession reflects pressure from European AI startups, Mistral in France, Aleph Alpha in Germany, Silo AI in Finland, who argue the AI Act's risk classifications and conformity assessments favour deep-pocketed incumbents.

Virkkunen's language marks a shift from the commission's 2023 posture, when the AI Act was negotiated as a global gold standard for trustworthy AI. The regulation bans social scoring, real-time biometric identification in public spaces, and manipulative practices, while imposing strict requirements on high-risk systems in healthcare, education and critical infrastructure. Industry groups have warned compliance costs could exceed €100,000 per model for small developers, effectively creating a moat for US hyperscalers.

Macron's summit reframes the French narrative

Emmanuel Macron conceived the AI Action Summit as a counterweight to the UK's 2023 Bletchley Park summit, which focused on existential risk. The French president has consistently argued that Europe's comparative advantage lies in application-layer AI, healthcare, energy, defence, rather than foundation models dominated by US capital. His pitch to the 1,500 attendees: regulate the risks, but do not regulate the opportunity out of existence.

The summit's final declaration, negotiated over weeks, commits signatories to "inclusive and sustainable AI" and launches a public-interest AI platform backed by €400 million in initial French funding. Notably, the US and China did not sign. Vance's presence and his deregulatory rhetoric suggest Washington prefers bilateral engagement over multilateral declarations it cannot control.

European industry welcomes the pressure

Behind closed doors, European AI executives have been more aligned with Vance than with Brussels. Mistral's Arthur Mensch has argued the AI Act's compute thresholds for systemic risk capture models that are already obsolete. Aleph Alpha's Jonas Andrulis has warned that conformity assessment requirements will delay deployment in regulated sectors by 18 to 24 months. Even some MEPs who negotiated the act have privately conceded the implementing acts, due this year, must provide flexibility for open-source models and small-scale deployment.

The tension is structural. The EU's regulatory philosophy assumes ex-ante rules prevent harm; the US model relies on ex-post liability and market discipline. Vance's speech was an argument for the latter, delivered in the capital of the former. Whether Virkkunen's promised "innovation-friendly" adjustments amount to substantive changes or presentational tweaks will determine if the transatlantic rift narrows or widens.

What the trade escalation means for tech

The steel and aluminium tariffs do not target semiconductors, cloud services or AI directly. But they raise the cost of data-centre construction, steel racks, aluminium cooling systems, structural components, at a moment when European providers are racing to build sovereign compute capacity. The EU's Chips Act aims to double Europe's share of global semiconductor manufacturing to 20 percent by 2030; higher input costs complicate that timeline.

More broadly, the tariffs signal that the Trump administration views trade policy as a unified lever. If the EU retaliates with countermeasures on US tech services, digital advertising, cloud contracts, platform fees, the dispute migrates from Pittsburgh steel to Paris data centres. Von der Leyen's team has prepared a list of US services exports vulnerable to retaliation, though deploying it would mark a significant escalation beyond goods.