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by SAM McNEIL, Associated Press
BRUSSELS (AP) — In the wake of President Donald Trump’s provocative stance on Greenland, the European Union is preparing to respond to the United States with a set of countermeasures.
As a conglomerate of 27 countries primarily focused on trade, the EU’s arsenal largely consists of economic tools. Among these are the potential imposition of significant tariffs on American products and the much-discussed “trade bazooka,” a concept championed by French President Emmanuel Macron.
This so-called “trade bazooka” refers to the bloc’s Anti-Coercion Instrument (ACI), which is designed to impose penalties on individuals or entities exerting undue influence over the EU.
The penalties could result in substantial financial repercussions for U.S. businesses, including restricted access to the EU market, exclusion from public contracts within the EU, and possible limitations on foreign direct investment and the exchange of goods and services.
Currently, there is limited support within the EU for deploying this strategy, with France being a notable exception.
Macron warned in Davos on Tuesday that additional tariffs by the U.S. could force the EU to use its anti-coercion mechanism for the first time.
“The crazy thing is that we could find ourselves in a situation where we use the anti-coercion mechanism for the very first time against the United States,” said Macron, arguing that allied countries should be focusing instead on bringing peace to Ukraine.
“Can you imagine it? It’s crazy. I regret it, but it is the consequence of unnecessary aggressiveness. Still, we must all remain calm.”
Macron described the mechanism as “a powerful instrument and we should not hesitate to deploy it in today’s tough environment.”
EU leaders will hold an emergency summit in Brussels on Thursday over tensions with Trump.
The ACI was established by the European Commission in 2021 after Beijing restricted trade to Lithuania over its ties with Taiwan, which is claimed by China as its territory.
“The primary objective of the ACI is deterrence. The instrument will, therefore, be most successful if there is no need to use it,” according to a commission statement issued before the dispute over Greenland.
It would take at least six months to activate the ACI.
The value of EU-U.S. trade in goods and services amounted to 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros a day, according to EU statistics agency Eurostat.
Europe’s biggest exports to the U.S. are pharmaceuticals, cars, aircraft, chemicals, medical instruments, and wine and spirits.
Associated Press writer Sylvie Corbet in Paris contributed to this report.
