The European Union is reportedly contemplating a series of measures to counter the U.S. threat of tariffs due to its opposition to President Donald Trump‘s plan for Greenland.
EU’s Unused Trade Powers
These measures include trade retaliation, reducing defense ties, and the potential use of a “bazooka” trade tool, reported The Wall Street Journal on Sunday.
The so-called “bazooka” trade instrument, never previously deployed, was adopted in 2023. It would give the EU sweeping powers to impose export controls, levy tariffs on services, curb intellectual-property protections, and bar U.S. companies from competing for public procurement contracts across Europe. However, the bloc is not expected to take significant action before the new tariffs come into force on February 1.
To deploy the “bazooka” measure against the U.S., the European Commission would need backing from a qualified majority of member states, meaning support from just over half of them, representing at least 65% of the EU’s total population.
According to an earlier report by the Financial Times, French President Emmanuel Macron had plans to urge the EU to activate its anti-coercion instrument.
Meanwhile, on Sunday, EU Commission President Ursula von der Leyen confirmed speaking to Macron, Italian Prime Minister Georgia Meloni, U.K. Prime Minister Keir Starmer and Chancellor of Germany, Bundeskanzler Friedrich Merz, while expressing a joint solidarity for Greenland.
Greenland Tariffs Threaten EU-US Deal
U.S. Trade Representative Jamieson Greer urged the EU to keep the Greenland tariff dispute separate from the broader U.S.-EU trade agreement, suggesting that the EU has the option to “silo” the Greenland issue away from the trade deal and avoid dragging the agreement into a broader political confrontation.
The EU’s response is significant given the recent trade agreement between the U.S. and the European Union in July, which was predicted to benefit U.S.-based LNG exporters and the broader tech sector. The deal committed the EU to buy $750 billion in U.S. energy over three years and invest an additional $600 billion in the U.S. economy.
Photo by rarrarorro via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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