EU considers deploying its trade ‘bazooka,’ its Anti-Coercion Instrument, against the U.S.
Donald Trump’s decision to slap tariffs on countries that have shown support for Greenland is pushing transatlantic relations to a breaking point as EU leaders contemplate ways of retaliating against Washington that until now have been unthinkable.
Relations between Washington and Europe have been rocky for months as the U.S. president has wavered on support for Ukraine, pressured EU countries into accepting a lopsided trade deal and forced NATO allies to massively ramp up their spending on defense.
Even at the height of those tensions, EU leaders stopped short of hitting back — arguing that the risk of having the United States pull out of NATO was greater than any bad trade deal.
But now, as Trump ramps up his claims on Greenland, sparking protests over the weekend in the streets of Nuuk and Copenhagen, European leaders are facing increasingly loud calls to drop their softly-softly approach and prepare for confrontation. The fact that Trump triggered his tariffs just after the EU signed a major trade deal with Latin American countries is only deepening the sense of resolve among some Europeans.
“I’m convinced that we must not give in,” said Jérémie Gallon, a former French diplomat and current senior managing director at McLarty Associates, an international strategic advisory firm based in Washington. “Resisting a new attempt at humiliation and vassalization is the only way Europe can finally assert itself as a geopolitical actor.”
One option being floated by centrist and left-wing politicians is for Europe to wheel out its Anti-Coercion Instrument, the EU’s so-called trade “bazooka” — a powerful trade retaliation tool that was originally conceived to fend off bullying from China and that would allow Europe to impose tariffs and investment limits against offending nations.
French President Emmanuel Macron has joined those calling for the instrument to be deployed against the U.S. [Continue reading…]