Europe's Most Effective Response To Trump? Cancel US Patent Monopolies
President Donald Trump and Larry Ellison
Donald Trump does not appear to be backing down from his obsession with seizing a big chunk of real estate in the form of Greenland. He now is set on whacking American consumers with another big tax hike in the form of $75 billion in tariffs on imports from the European countries most vigorously defending the status quo with Greenland and Denmark.
To be clear, contrary to what you read in the newspaper, these tariffs are taxes on us, not the exporting country. That fact might be too complicated for Donald Trump and little children, but we are the ones who pay the tariff. Losing some of their export market is a negative for the countries targeted, but at this point everyone in the world understands that the United States is no longer a reliable market and has made plans to adjust this reality.
But Trump is not likely to stop with his tariffs. Just as he can’t acknowledge that he lost the 2020 election, by a big margin, he can’t accept that Greenland does not belong to him. He is a seriously demented man who has decided he wants Greenland and has to have it.
Europe is struggling to find a way to respond effectively. There are discussions of imposing tariffs on U.S. exports, which can inflict some pain on U.S. companies, but probably not enough to matter to Trump. And just as Trump’s tariffs hit U.S. consumers, European tariffs will make things less affordable for hard-pressed families.
There is a simple alternative that is likely to be more effective in getting attention here and would actually help Europe’s consumers. European countries can announce that they will no longer honor U.S. owned patents and copyrights.
That will very quickly get the attention of consumer product companies like Apple, which depends on thousands of patents for its iPhones and other products, and earns over a hundred billion annually. Similarly, software companies like Oracle (as in right-wing billionaire Larry Ellison) and Microsoft depend on patent and copyrights to make their leading shareholders incredibly rich. Entertainment outfits like Disney and Paramount (also owned by the Ellison clan) depend almost entirely on copyright monopolies as the basis for their billions of dollars in annual earnings.
Putting U.S. patents and copyrights on the line is a guaranteed attention grabber. The vast fortunes of the sleaze buckets who put Trump into the White House and back his attack on democracy in the United States and around the world will suddenly be thrown into question.
There is even precedent for going this route. In World War I, the United States stopped honoring German patents and instead instituted a system of compulsory licensing. Under this system, anyone could freely use a German patent for a small fee. European countries can go a similar route in response to a U.S. government that says it has no use for international law.
Not only will the patent/copyright route inflict far more pain on the big actors in Donald Trump’s America, in contrast to the tariff route, it will offer real gains for the people of Europe. Imagine everyone being able to get iPhones at less than half their current price, free or near free Microsoft software, and the latest Disney and Paramount productions at zero cost. This is genuinely a case where everyone can gain from free trade: eliminating patent and copyright monopolies.
This move also exposes the Big Lie of economic policy of the last half century. There has been a massive upward redistribution of income over this period. There is more the case in the United States than in Europe, but income has also shifted upward there as well. That has contributed to the rise of right-wing populism in Europe.
The Big Lie is that the upward redistribution was the natural workings of the market. The claim is that the course of technology and globalization just turned out to benefit the more educated segments of the population, and especially those at the very top.
That is a lie since there is nothing natural about the government-granted patent and copyright monopolies that play a huge role in this upward redistribution. Governments could have made these monopolies shorter and weaker rather than longer and stronger, or even relied more on other mechanisms to support innovation and creative work.
There were other ways in which government actions redistributed income upward, but that is a longer discussion that can be dealt with elsewhere. The key point is that European countries by opting to not respect U.S. patents and copyrights, have an incredibly powerful weapon to use against Donald Trump and his rich supporters. The time has come for them to go nuclear.
Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.
Reprinted with permission from Dean Baker.
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