The U.S. ambassador to the European Union has warned that European companies could face “devastating” retaliation from Washington if Brussels proceeds with plans to restrict American firms’ access to parts of the European market, according to a Financial Times report published Sunday .

Ambassador Andrew Puzder told the FT that European businesses should be wary of the consequences, stating: “They should be aware that could happen, and it would be devastating for those companies given the size of the American market”.

The warning comes after the European Commission decided to allocate the majority of valuable spectrum for mobile satellite communications to European companies, while reducing the share available to American providers . The move is part of a broader EU push to reduce dependence on major American tech companies—particularly Elon Musk’s SpaceX, which operates the Starlink satellite network—and to strengthen domestic European firms .

Under the proposed rules, a portion of the 2 GHz band used for direct-to-smartphone satellite connectivity would be reserved for government services, with the remainder allocated for commercial use in a way that advantages European operators, potentially limiting opportunities for American and Chinese companies including SpaceX .

SpaceX has sharply criticized the proposed changes, warning that the move could degrade communications quality in Ukraine, where Starlink has been critical for both civilian and military connectivity since Russia’s full-scale invasion .

Puzder acknowledged Europe’s legitimate interest in protecting sensitive government information, but argued that Brussels should not weaken American companies’ competitiveness in order to boost European ones. “You don’t make European companies more competitive by making American companies less competitive,” he said .

The ambassador also criticized the EU’s Digital Markets Act (DMA), under which American tech giants have been fined billions of euros, questioning whether the law is genuinely aimed at addressing competition issues in digital markets or at extracting revenue from U.S. companies to benefit Europe .

Puzder warned that EU regulations and fines could deter American firms from investing in Europe, ultimately hindering the growth of Europe’s own tech industry. He urged Washington and Brussels to cooperate on artificial intelligence and quantum computing rather than clash over tech regulation, stating: “It would be much easier to win the tech competition with China if we cooperated with Europe instead of fighting with it” .

The transatlantic tension over satellite spectrum and tech regulation adds another layer to broader U.S.-EU trade frictions, which have included disputes over tariffs and digital services taxes in recent years .