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Alarmed by the President Donald Trumpaggressiveness GreenlandAfterwards, the EU is preparing to take countermeasures against the United States.
But as a largely 27-nation trading bloc, the EU’s toolbox is largely financial, ranging from steep tariffs on U.S. goods to the so-called “trade bazooka” touted by the French president Emmanuel Macron.
The term is shorthand for the EU’s Anti-Coercion Instrument (ACI), which can sanction individuals or institutions found to be exerting undue pressure on the EU.
These sanctions may restrict EU market access, prohibit them from participating in EU public tenders, and may limit foreign direct investment and restrict the import and export of goods and services, resulting in untold billions of dollars in costs for U.S. businesses.
So far, there is little support for its use among the 27 EU countries except France.
Macron warned in Davos on Tuesday that additional U.S. tariffs could force the EU to use its anti-coercion mechanisms for the first time.
“The crazy thing is that we may find ourselves in a situation where for the first time we are using counter-coercion mechanisms against the United States,” Macron said, arguing that allies should focus on bringing peace to Ukraine.
“Can you imagine? This is crazy. I’m sorry but this is the consequence of unnecessary aggression. However, we all have to stay calm.”
Macron described the mechanism as “a powerful tool that we should not hesitate to deploy in today’s difficult environment.”
EU leaders to hold emergency summit brussels Thursday due to tensions with Trump.
ACI was established by the European Commission in 2021 after Beijing restricted trade with Lithuania over its ties to Taiwan, which China claims as its territory.
“The primary objective of the ACI is deterrence. Therefore, it will be most successful if there is no need to use the tool,” according to a commission statement released ahead of the Greenland dispute.
It takes at least six months to activate ACI.
According to the EU statistics agency, the EU’s trade in goods and services with the United States will reach 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros per day eurostat.
Europe’s largest exports to the United States are pharmaceuticals, cars, aircraft, chemicals, medical devices, and wine and spirits.
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Associated Press writer Sylvie Corbett in Paris contributed to this report.