For those of us who aren’t policy nerds, it may come as a little surprise that the European Union has a powerful trade weapon designed to respond when foreign countries try to bully it economically. It is formally called the Anti-Coercion Instrument, but in Brussels it is nicknamed the “trade bazooka”. It was created for worst-case scenarios — where another country uses tariffs or trade threats to force political concessions.
What U.S. President Donald Trump has done qualifies as a worst-case scenario for the European Union. Over the weekend, Trump threatened to impose sweeping new tariffs of up to 25% on multiple European countries unless they agreed to the “complete and total purchase” of Greenland by the United States.
Greenland is Danish territory. This puts Denmark, which is inside the European Union, under pressure to surrender sovereign control.
Enter the bazooka, naturally. However, a meeting among EU ambassadors meeting in Brussels on Sunday led to hemming and hawing on its deployment. Talks are to continue.
Maybe this comes as a surprise, but one EU diplomat put it bluntly: there is “no question” of deploying the Anti-Coercion Instrument against the US.
France stood out as demanding tough retaliation, but other countries got cold feet. Something similar — though less dramatic — happened last year, leading to a trade deal that doesn’t put Europe in a particularly good position.
The Anti-Coercion Instrument came into force in 2023, and allows the EU to respond quickly with tariffs, investment restrictions, procurement bans, and other penalties. It only requires approval from a qualified majority of member states.
Trump is aggressive and threatening, and Europe balks. The European Union fears that confronting the US would trigger harsh retaliation.
Europe…seems to feel weakened. But, as many have pointed out, it is ironic that the EU appears unwilling to use the very tools it designed to defend itself.
Supporters of the trade bazooka argue it could be deployed gradually and carefully, starting with limited measures and escalating only if necessary. For now, it remains carefully locked up.
