Shaken by renewed threats from Donald Trump linked to Greenland, the European Union is weighing possible retaliatory steps against the United States. Officials in Brussels say discussions are underway on how to respond if Washington escalates pressure, even as there is no full consensus yet among the EU’s 27 member states on the scale or timing of any counteraction.
As a bloc whose strength lies primarily in trade and market access, the EU’s most potent options are economic rather than military. These range from imposing higher tariffs on selected American goods to deploying what Emmanuel Macron has described as the EU’s “trade bazooka.” Despite the rhetoric, several member states remain cautious, concerned about triggering a broader trade conflict with the United States.
The so-called trade bazooka refers to the EU’s Anti-Coercion Instrument, a legal framework that allows the bloc to respond when a foreign power is deemed to be exerting economic or political pressure on an EU country or its companies. The instrument authorises a wide spectrum of responses, including restrictions on imports and exports, limits on trade in services, bans on participation in EU public procurement, and curbs on foreign direct investment.
In its most far-reaching form, the Anti-Coercion Instrument could effectively shut targeted countries or firms out of the EU’s single market, which encompasses around 450 million consumers. Given the size and purchasing power of that market, such a move could translate into losses running into billions of dollars for US companies and have knock-on effects across the American economy.
The mechanism was created by the European Commission in 2021, following a dispute in which China restricted trade with Lithuania over Vilnius’s engagement with Taiwan. At the time, Brussels argued that the EU needed a credible deterrent to prevent external powers from using economic pressure to influence political decisions within the bloc.
When unveiling the instrument, the Commission stressed that its primary purpose was to discourage coercion rather than to be used frequently. Officials noted that the tool would be most effective if its mere existence was enough to deter aggressive economic tactics, without ever having to be fully activated.
Even if EU leaders decided to proceed, the Anti-Coercion Instrument is not a quick-response weapon. Activating it would involve procedural steps and political approvals that could take at least six months, making it a slower but potentially more far-reaching option compared to immediate tariff measures.
The stakes are high because economic ties between the United States and the EU are among the largest in the world. According to Eurostat, total trade in goods and services between the two sides reached about €1.7 trillion, or roughly $2 trillion, in 2024, averaging around €4.6 billion in transactions every single day.
Europe’s main exports to the US include pharmaceuticals, automobiles, aircraft, chemicals, medical equipment, and wine and spirits. In the opposite direction, major American exports to the EU range from oil and gas to pharmaceuticals, aerospace products and cars, as well as high-value services such as cloud computing, payment systems and other professional and scientific services. Any escalation, EU officials warn, would therefore have significant consequences on both sides of the Atlantic.
