EU may deploy its unused ‘trade bazooka’ to retaliate against Trump tariffs on NATO allies for sending troops to Greenland
French President Emmanuel Macron is reportedly pressing the European Union to deploy its so-called “anti-coercion instrument” as retaliation against new tariffs.
In a Saturday social media post, President Donald Trump announced that Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland would face a 10% tariff beginning Feb. 1, increasing to 25% on June 1, until a “Deal is reached for the Complete and Total purchase of Greenland.”
The declaration followed the deployment of troops from those nations to Greenland earlier this week, purportedly for training exercises, at Denmark’s invitation.
Macron intends to urge the EU to trigger the anti-coercion instrument, the bloc’s most potent trade tool, which has remained unused since its adoption in 2023.
“He will be in contact throughout the day with his European counterparts and will request, on France’s behalf, the activation of the anti-coercion instrument,” a French official told the FT.
European Union officials are scheduled to convene Sunday to deliberate a response to Trump’s latest tariffs, even though a trade agreement was reached in July.
That agreement established U.S. tariffs on most products at 15% and required the EU to invest hundreds of billions of dollars in the United States. However, European lawmakers have not yet approved the pact, and now indicate that the NATO tariffs will probably postpone or scuttle it.
Meanwhile, the EU’s anti-coercion instrument has been characterized as a “trade bazooka” for its breadth and severity.
Created as a deterrent to shield the EU from “economic coercion” by non-member nations seeking to sway policy decisions, the tool can restrict not only trade in goods and services but also target foreign direct investment and financial markets.
Possible responses to Trump’s tariffs might involve levies on American technology firms, curbs on EU investments, or constraints on access to the single market.
When Trump threatened the EU with “reciprocal tariffs” last year, the anti-coercion instrument was considered but ultimately not deployed.
A less drastic alternative would be to implement retaliatory tariffs that the EU drafted last year but suspended after the U.S. agreement was reached, sources informed the FT.
The measures would affect approximately $100 billion in American exports. Their six-month pause is set to end on Feb. 7 unless the European Commission prolongs it.
A renewed U.S.-EU trade conflict looms after the economy and financial markets were destabilized by Trump’s “Liberation Day” surprise and ensuing high-stakes negotiations last year.
Trump has continued to insist on acquiring Greenland, maintaining that military options remain viable, while his administration has also kept alive the prospect of purchasing the territory.
This persists even though projections suggest that extracting oil and rare earth minerals from Greenland would take decades to yield any returns.
European authorities have stated that the troop deployment was intended to demonstrate their commitment to Arctic security, as Trump asserts that China and Russia pose a threat to Greenland—not to thwart a potential U.S. incursion.
On Saturday, Macron justified France’s military deployment to Greenland, referencing the nation’s dedication to national sovereignty and Arctic security.
“No intimidation or threat will influence us—neither in Ukraine, nor in Greenland, nor anywhere else in the world when we are confronted with such situations,” he said. “Tariff threats are unacceptable and have no place in this context. Europeans will respond in a united and coordinated manner should they be confirmed. We will ensure that European sovereignty is upheld.”