This is a guest post by Peter Balogh, Hungarian serial entrepreneur, founder and CEO of the BET-listed startup investor firm STRT Holding. He began his career with internet startups in Hungary in 1996, later joining Nokia in Finland before founding PDAmill and then NNG, growing it from 4 to over 800 employees across 5 continents. After leaving NNG, he shifted focus to advising and investing in Hungarian tech startups.
Well, brace yourself! Did you think the 10% general tariff was harsh? Trump has now really shifted into fifth gear: he has imposed a 100% tariff on all non-American films.
“Who gives a damn about movies?” you might say. Well, this is no longer about movies. With this move, Trump has stepped out of the lukewarm puddle of physical goods and into the much deeper, more dangerous waters of intellectual property. And that could change everything.
What makes this more dangerous than a truckload of steel tariffs?
Until now, it was “tariffs on Chinese socks, tariffs on German cars.” Okay, it hurt, but we understood the logic: physical products come and go, we tax them. But what is happening now? Intellectual property, royalties, movies—all these intangible “things” are getting the full “love package.”
This is a very slippery slope. America is the world’s leading exporter of “soft goods”: intellectual property, licenses, software, digital services. Legally and commercially, these are very similar categories. And if America starts a fight, the world will respond. From there, it becomes increasingly likely that sooner or later, tariffs will be imposed on software, cloud services, and streaming. Or dare I mention AI?
And if Trump doesn’t impose tariffs on these, it’s not out of the question that the EU or others will do so in response. Sooner or later, someone will press the “digital detach” button.
Digital Iron Curtain: Are we just steps away?
If tariffs are imposed on the digital services and software market, it will no longer be a simple trade dispute, but a hard-nosed national security issue for everyone. Think about how big the market share of American companies (Google, Amazon, Microsoft, etc.) are in these areas in Europe!
The only logical response for the EU, whether reactive or preventive, is to invest in European digital independence and European technology companies.
There is no other way. If we do not want to become totally dependent, we must develop our own solutions and build our own champions. And this is a huge opportunity for European startups.
Wake up, Europe! Intellectual Property is the key to the kingdom
Okay, so Trump has now turned his attention to movies. Big deal? Hell no! This is a huge wake-up call for Europe. Until now, it was all about GDP, export-import balances, jobs—as if we were still living in the 20th century, where factory smoke meant prosperity. But the world has changed dramatically.
The economic independence and stability of the future does not depend on the number of containers loaded in ports, but on the ideas in people’s heads and the intellectual property that protects them.
Trump’s latest move (however crazy it may be) highlights precisely this: intellectual property independence is not a hobby for the elite, but a matter of survival.
If the license for your software, algorithm, film, music, or medicine depends on the whims of another continent, then your economic sovereignty is worthless. You can be as green and digital as you like, but if everything under the hood is American, it doesn’t matter.
And, of course, all this is worthless without cooperation at the EU level. Brussels needs to wake up. It is not enough to just pour money into Horizon Europe and other flashy programs. We need smart regulation and targeted incentives that truly help European intellectual property to be created, protected and brought to market. Because if we don’t act now, we will truly become a digital colony of America (or China). The question is, does Europe have the guts to do this?
And what will happen to the big players? Risk radar for EU companies
Okay, this is an opportunity for startups, that’s clear. But what about the large, comfortable European medium-sized and large companies that have been happily using American software, licenses, and cloud services? What does this mean for them?
In short: s***. In longer terms: it’s time to wake up from Sleeping Beauty’s slumber, because the digital dragon is already prowling behind the castle walls.
Be prepared for these risks if you work for or run a company like this:
Digital/IP dependency as a minefield: Until now, American tech has been cheap and convenient. Now it may turn out to be a time bomb. What if your key software or platform is subject to tariffs? Or worse, access is restricted for political reasons? Your operations could grind to a halt overnight.
Global supply chains falling apart (again): Did you think we were back on track after COVID? Ha ha. Now digital supply chains could be at risk. If your US partners are forced to raise prices or pull out, you’ll have to find alternatives – but are there any in Europe?
Regulatory chaos and compliance nightmares: Prepare for rapidly changing rules, export/import restrictions, and data protection hassles. Lawyers will be working overtime, and compliance costs will skyrocket.
Restricted market access: If the digital world starts to fragment, it could become more difficult to enter the US market, even if you are European. Protectionism is contagious.
Geopolitical chessboard: Your company could unwittingly become a pawn in geopolitical games. You could find yourself on a sanctions list overnight, or your competitor could get a boost from the government.
So, dear business leaders, it’s time to pull out your contingency plans. Diversification, seeking European alternatives, developing your own IP, reducing digital dependency – these are no longer just buzzwords, but keys to survival. Are you ready? Or are you waiting for the dragon to come knocking?
And what about us here in Central and Eastern Europe?
Okay, it’s a problem for the big guys, but an opportunity for startups. But what about us here in the “wild east”? Are we just watching the big guys fight from the sidelines, hoping we don’t get hit by a stray punch? Hell no! For us, it’s both an opportunity and a curse.
An opportunity because our lower cost base and still available (and hungry!) engineering talent could make us attractive to European tech companies that are now desperately seeking alternatives to their dependence on the US. We could become the “smart workshop” of digital Europe, a nearshoring paradise.
A curse because if the big players start building walls, we could easily find ourselves on the wrong side or caught between two fires. Our small economies are more vulnerable, and our local governments… well, let’s face it, they are not always champions of strategic thinking and quick response.
So, CEE region, here’s your chance to move up the food chain and not just be assembly plants in the digital age. But to do that, we can’t just wait for a windfall (or EU money). We need to be proactive, create an attractive environment for tech companies, and train our own digital warriors. Otherwise, we’ll be left on the sidelines.
The conclusion? More money for EU Tech startups!
While most people are just shrugging off the 100% film tax, savvy investors are already seeing the next big wave. The fight for digital autonomy has begun. The EU needs to pour money into its own technology sector to reduce its dependence.
This means that it’s time to invest in European tech companies, startups developing digital infrastructure, and cybersecurity solutions. Because the winds of change are blowing, and those who set sail quickly will go far.
