Transatlantic ties are at their lowest since US President Donald Trump returned to the White House and unleashed painful tariffs against allies and rivals alike within weeks.

"There are real issues that deserve discussion. We hope that there will be real resolutions that bring people together on both sides of the Atlantic, and the sooner, the better," Smith said.

"We're all going to need to see how the trade discussions unfold," he said.

Trump has hit steel, aluminium and auto imports with 25-percent tariffs, and in April he imposed sweeping 20-percent levies on EU goods before announcing a 90-day pause.

Now the European Union and the United States are in talks to avoid a bitter conflict that risks undoing a trade relationship worth 1.6 trillion euros ($1.8 trillion).

Smith was in Europe to reaffirm Microsoft's commitment to the continent, vowing that the company would protect European users' data against any orders in court.

There are fears in Europe about what the cosying up of American Big Tech chief executives to Trump -- including Meta chief Mark Zuckerberg -- means for the continent where American technologies dominate.

Smith refrained from directly criticising Trump, saying that doing so would harm the "bridge" he seeks to build between the United States and Europe.

"We believe that one of the great strengths of the world is the transatlantic relationship. It's been important and good for the United States, it's been important and good for Europe," Smith said.

He noted that Microsoft had "very important" relationships with both sides.

- Bigger binding ties -

Smith was in Europe as the continent comes to terms with how it should respond to the changing nature of the US-EU relationship.

Calls have grown in the EU to wean the bloc off US technology, as Europeans fear Trump could demand that American companies sever Europe's access in any trade war.

Microsoft recognised Europe's changing view of the United States, Smith said, but the ties that bound the two sides were "so much bigger" than "issues that might divide us".

"So let's address the issues that divide us, and let's remain committed to the ties that bind us, because I think they're fundamental, not just to two continents, but to the entire world," he added.

Although Europe is now reckoning with what a future EU-US relationship will look like, Smith struck an optimistic note that the two sides could resolve issues.

"I don't think we can recommit across the Atlantic until we work through the issues that are currently on the trade table, so to speak. But I believe in a future."

One area in which Microsoft has poured tens of billions of dollars is artificial intelligence, which Smith said was something it sought to develop with European players.

Despite the excitement over AI, there are also concerns about the environmental impact, which Smith said Microsoft was focused on.

"We're committed to reducing our carbon emissions, to being carbon negative by 2030," he said, adding that Microsoft also saw AI playing a role in addressing the issue.

"It will lead to, we think, the kinds of breakthroughs the world needs," he said.

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