A recently issued White House executive order aims to boost competition and innovation in America’s commercial space industry by cutting state and federal red tape, and by streamlining the permitting and licensure process for launching and receiving spacecraft. Across the pond in the European Union (EU), however, new legislation that unduly singles out U.S. companies could hamper these efforts.
At a time when China’s space sector is making immense strides, the Trump administration should use the ongoing U.S,-EU trade negotiations to oppose these trade barriers that imperil U.S. space leadership. Potentially at-stake are not only national security, but more than $1 trillion in economic benefits and opportunities for Americans.
The EU Space Act’s commendable goal is harmonizing regulation of space activity across member states in order to lower costs and complexity for business, while promoting safety, resilience, environmental sustainability, and a competitive EU space sector. But in practice, it reads more like a proscription for shielding less efficient local businesses from foreign (read: American) competition without concomitant safety or environmental benefits.
For starters, the EU Space Act mandates differing registration systems for EU-based and foreign space operators that burden the latter significantly more. Foreign operators must undertake an assessment process before a special EU Agency for the Space Programme (EUSPA), which will require a qualified majority or consensus vote of members. Besides increasing complexity, uncertainty, and cost, this would also abet discrimination against foreign firms for political rather than safety, security, or environmental reasons.
By contrast, EU-based operators would need only obtain approval from a single member state, which will have flexibility in how it applies the Space Act’s technical standards. And since registration fees are proportionate to applicant turnover, larger U.S. firms would pay significantly more, subsidizing smaller non-U.S. competitors.
Worryingly, the Space Act also allows EU operatives to inspect foreign space operators’ facilities, including on U.S. soil, subject to international agreements. If the U.S. government consents, it would expose leading American space firms to heightened risk of trade-secret theft or leakage. Since many of these companies conduct both civilian and military projects, this requirement could compromise national security.
It would also likely violate U.S. export-control laws like the International Traffic in Arms Regulations (ITAR), which restrict access to controlled facilities and the sharing of certain technical data. This could be used as an excuse to exclude American operators from the EU market entirely.
Most significantly, the Space Act imposes additional costly regulations on firms based on arbitrary “constellation size”—that is, the number of operational spacecraft a company operates under a common mission and orbital-deployment plan. “Mega-constellations” consist of 100-999 satellites, and “giga-constellations” consist of 1,000 or more. Since Europe’s largest planned constellation will include just 290 satellites, additional requirements are unlikely to apply to any EU firms for the foreseeable future.
By contrast, leading U.S. space operators Amazon and Starlink—each operating thousands of satellites—would be the only two worldwide facing giga-constellation rules. These disadvantage them against European competitors, while discouraging those firms from expanding and competing vigorously, contrary to the Space Act’s stated objectives.
There’s no evidence that safety and environmental concerns justify additional burdens based on constellation size. Specific spacecraft used, and the material they collect while orbiting, affect collision and debris risk. A larger constellation under the right collision-avoidance and maintenance standards will carry the same or an even lower risk than a smaller one. And the largest constellation operators also tend to possess the most advanced technology, spacecraft, and ability to implement the best safety and environmental practices.
Since the EU Space Act, by effect and design, singles out large U.S. companies for expensive compliance burdens without proportionate returns in environmental or safety benefits, it operates as a nontariff trade barrier under World Trade Organization rules. It could also undermine U.S. national security while compromising expansion, competition, and innovation in the space sector—both here and across the Atlantic.
Though it won’t take effect until at least 2030, and rules may not be finalized until 2028-29, U.S. space companies making multibillion dollar investments in next-generation technology and projects must plan ahead to weigh the risk and uncertainty that the EU Space Act will carry. This makes ongoing U.S.-EU trade talks a great opportunity to push for abolition or curtailment of these anticompetitive and discriminatory trade barriers. And given the president’s commitment to reducing red tape burdening both U.S. firms and foreign ones operating here, they may get there with a carrot rather than another tariff stick.
