European Union (EU) leaders are convening in Brussels on Thursday for an emergency summit. France said on Monday that the European Union must be prepared to use wide-ranging "anti-coercion" measures targeting U.S. services if President Donald Trump follows through on his threat to impose more tariffs on his NATO allies over Greenland. This came after President Trump has linked his drive to take control of Greenland to his failure to win the Nobel Peace Prize, saying he no longer thought "purely of Peace" as the row over the island threatened to reignite a trade war with Europe.
Asked by NBC News in a brief telephone interview on Monday if he would use force to seize Greenland, Trump said “No comment,” adding he would "100%" follow through on plans to hit European nations with tariffs without a Greenland deal. Trump has intensified his push to wrest sovereignty over Greenland from fellow NATO member Denmark, prompting the European Union to weigh hitting back with its own measures.
The dispute is threatening to upend the NATO alliance that has underpinned Western security for decades and which was already under strain over the war in Ukraine and Trump's refusal to protect allies which do not spend enough on defence. Trump's threat has rattled European industry and sent shockwaves through financial markets amid fears of a return to the volatility of 2025's trade war, which only eased when the sides reached tariff deals in the middle of the year.
Russia declined to comment on whether the U.S. designs on Greenland were good or bad but said it was hard to disagree with experts that Trump would "go down in... world history" if he did take control of the island.
EU leaders will discuss their options at an emergency summit in Brussels on Thursday. One option is a package of tariffs on 93 billion euros ($108 billion) of U.S. imports that could automatically kick in on February 6 after a six-month suspension.
Another option is the "Anti-Coercion Instrument" (ACI), which has never yet been used and which could limit access to public tenders, investments or banking activity or restrict trade in services, in which the U.S. has a surplus with the bloc, including in digital services.
The ACI, which was finally approved in 2023, is seen by many as a "nuclear option" that is ideally meant as a deterrent.
The ACI allows the 27-nation EU to retaliate against third countries that put economic pressure on its member countries to force a policy shift, and offers far wider scope for action than just counter-tariffs on U.S. exports.
The ACI was proposed in 2021 as a response to criticism within the bloc that the first Trump administration and China had used trade as a political tool.
European law gives the European Commission up to four months to examine possible cases of coercion. If it finds a foreign country's measures constitute coercion, it puts this to EU members, which have another eight to 10 weeks to confirm the finding.
Confirmation requires a qualified majority of EU members - a higher hurdle to clear than that for applying retaliatory tariffs.
The Commission would normally then negotiate with the foreign country in a bid to stop the coercion. If that fails, it can implement ACI measures, again subject to a vote by EU members. These should enter into force within three months.
The whole process could take anywhere from a few months to a year to complete.
Source Name : Economic Times