EU considers trade bazooka against US over Greenland threats

Tuesday 20 January 2026 - 14:20

By: Dakir Madiha

EU considers trade bazooka against US over Greenland threats

European Union finance ministers gathered in Brussels on Tuesday to weigh the bloc's most potent commercial weapon against the United States, signaling an unprecedented escalation in transatlantic ties amid President Donald Trump's threats to impose tariffs unless Denmark sells Greenland. Danish Economy Minister Stephanie Lose told reporters before the meeting that the EU keeps all options open, including the Anti-Coercion Instrument, informally known as the trade bazooka. She stressed that while escalation is unwanted, a unified European response becomes essential if pressures persist, with nothing ruled out.

Adopted in 2023 but never activated, the instrument grants Brussels sweeping powers to counter foreign economic bullying by restricting access to the EU's single market of 450 million consumers, imposing export controls, barring US firms from public procurement, and curbing American intellectual property protections. Divisions surfaced on the appropriate reply. French President Emmanuel Macron emerged as the strongest advocate for deployment, with an aide confirming he would formally push for its activation in talks with European leaders; Economy Minister Roland Lescure branded Trump's pressure unacceptable and urged readiness for anti-coercion measures.

Germany struck a more cautious note. Chancellor Friedrich Merz voiced hopes to avoid escalation where possible while affirming the bloc's commitment to safeguarding European interests. Finance Minister Lars Klingbeil backed tapping all available tools, noting a legally robust European toolkit for countering economic blackmail with highly sensitive measures. European Commission President Ursula von der Leyen warned at the Davos World Economic Forum of a resolute, united, and proportionate EU response, telling Trump directly that handshakes between friends must hold weight in politics and business alike.

Beyond the Anti-Coercion Instrument, the EU holds 93 billion euros in retaliatory tariffs targeting US products like aircraft, cars, and bourbon, set to activate automatically on February 7 absent extension. The largest European Parliament group moved to suspend ratification of a recently inked EU-US trade deal. Trump announced Saturday that eight European countries, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the United Kingdom face 10 percent duties from February 1, rising to 25 percent by June 1, unless a deal secures Greenland's full purchase. US Treasury Secretary Scott Bessent dismissed EU threats at Davos as imprudent, with EU leaders convening an emergency Brussels summit Thursday to align their strategy.