NAIROBI, Kenya- The European Union is considering whether to use a powerful new trade tool — often referred to as the “trade bazooka” — in response to US President Donald Trump’s threat to impose tariffs on European allies over their opposition to his push involving Greenland.
Why the EU Is Considering It
President Trump announced plans to impose additional tariffs, starting at about 10 per cent in February and rising to 25 per cent by June, on goods from several European countries unless they agree to discussions about the US acquiring Greenland, a semi-autonomous territory of Denmark with strategic importance.
European leaders condemned the tariffs and held emergency talks on how to respond.
What the “Trade Bazooka” Is
The “trade bazooka” refers to the EU’s Anti-Coercion Instrument (ACI) — a regulation adopted in 2023 but never before used. It gives the European Union legal authority to retaliate against economic pressure from third countries, including by:
- Imposing counter-tariffs on imports
- Restricting access for foreign companies to the EU market
- Limiting foreign investment or services
- Targeting intellectual property rights or public procurement access
The ACI is designed specifically to protect the EU and its member states from what Brussels defines as economic coercion, such as threats that link economic penalties to political demands.
How the EU Is Approaching It Now
EU leaders are weighing whether to deploy the ACI in this situation — potentially for the first time ever — but have not yet agreed on immediate action.
Some member states advocate prioritising diplomacy and dialogue with the United States before resorting to retaliatory measures.
French President Emmanuel Macron has urged activation of the trade bazooka, while other governments remain cautious about escalating into a broader transatlantic trade conflict.
Broader Trade and Diplomatic Context
The consideration of the trade bazooka comes amid fears that Trump’s tariff threats could strain long-standing alliances, disrupt the EU-US economic relationship, and jeopardise cooperation on security issues.
The issue has sparked emergency meetings among European capitals to weigh options, including counter-tariffs and other punitive measures if tensions deepen.
