EU Weighs ‘Nuclear Option’ as Trump Threatens Tariffs Over Greenland
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The European Union is considering deploying its newly established anti-coercion instrument in response to former U.S. President Donald Trump’s threats to impose tariffs on several European nations and others if Denmark does not cede Greenland to the United States.
The escalating dispute, which surfaced on Saturday, saw Trump vow to levy tariffs of up to 25% on EU members Denmark, Finland, France, Germany, the Netherlands, and Sweden, as well as non-members Britain and Norway. This demand, centered on the Danish territory of Greenland, has prompted calls within the EU for a strong response.
French President Emmanuel Macron has publicly discussed the possibility of retaliating with the EU’s trade weapon, established in 2023 but, until now, unused. Valerie Hayer, leader of the liberal Renew group in the European Parliament, echoed this sentiment, advocating for the instrument’s immediate activation.
Dubbed a “bazooka” or “nuclear option” by some observers, the anti-coercion instrument is designed to deter economic pressure tactics against any of the EU’s 27 member states. The EU defines such coercion as any third country “applying – or threatening to apply – measures affecting trade or investment” that interferes with the “legitimate sovereign choices” of the EU and its members.
How the EU’s Trade Weapon Works
The instrument grants the EU the authority to implement a range of countermeasures, including restrictions on both imports and exports within its single market of 450 million consumers. Furthermore, Brussels would gain the power to limit access for American companies to lucrative public procurement contracts across Europe.
The EU previously considered utilizing this tool during trade negotiations with Trump last year to avert substantial tariffs, ultimately reaching a compromise. A key potential target in any retaliatory action would be American tech giants, given the United States’ significant services surplus with the EU. Officials in Brussels have reportedly already compiled a list of U.S. services that could be targeted.
The creation of the instrument was directly influenced by Lithuania’s experience in 2021, when it accused China of imposing export bans after Vilnius permitted the opening of a Taiwanese diplomatic representation.
Activation Process and Timeline
Both the European Commission and individual member states possess the authority to request the instrument’s activation. However, its implementation requires approval from at least 55% of member countries, representing 65% of the bloc’s population.
Even with approval, the process is lengthy. The European Commission would first undertake a four-month investigation into the alleged detrimental trade policies of the third country. Following the investigation, member states would have an additional eight to ten weeks to endorse any proposed action. Only then could the Commission finalize measures, which would take effect within six months – though the EU acknowledges this timeline is indicative.
However, even initiating an investigation under the instrument would serve as a powerful signal of the EU’s resolve to defend its interests against a key ally. “The United States is making a miscalculation that is not only dangerous but could be painful,” Hayer stated. “The anti-coercion instrument is our economic nuclear weapon.”
