The European Union backed off from immediately triggering a trade “bazooka” in retaliation for US President Donald Trump’s tariff threats over Greenland during an urgent meeting in Brussels on Sunday, people familiar with the talks told Euronews.
EU member states want to first prioritise dialogue and diplomacy with the US, and will in the meantime hold off from immediately triggering retaliatory measures, the sources said.
The “bazooka”, known as the anti-coercion instrument (ACI), is a powerful tool adopted in 2023 that allows the EU to punish unfriendly countries for “economic blackmail” by limiting trade licenses and shutting off access to the single market. The instrument has never yet been used by the bloc.
Another diplomatic source said that the European Commission had presented a range of options, including the ACI, with ambassadors representing member states engaging in a discussion without voting in favour or against any options.
The EU could however revive a €93-billion retaliation package targeting US products if Trump follows through on his threat to slap an additional 10% tariff on eight European countries — including Denmark, Germany and France — on February 1, the sources added.
A decision on whether to reinstate the tariffs, suspended last year, will be taken after that Trump-imposed deadline.
The €93-billion package was prepared last year amid uncertainty over whether Trump would agree to an EU-US trade deal, and foresees retaliatory EU tariffs of up to 30% on a range of US products from cars to poultry.
The package was shelved when the EU-US trade deal was agreed between Commission President Ursula von der Leyen and President Trump in a Scottish golf course last summer, setting a baseline tariff of 15% on most EU exports to the US, while slashing duties on many US industrial goods to zero.
Trump’s threats to impose further tariffs over the Greenland dispute have however derailed that deal, after the European Parliament’s main political leaders saying a vote on its implementation, pencilled in for the end of the month, would now be put on hold.
Meanwhile, European Council President António Costa has convened an extraordinary summit of EU leaders in the “coming days”. A source familiar with the matter suggested the summit will take place on Thursday, January 22.
A diplomat familiar with the Sunday talks in Brussels, in which all 27 member states were represented by their ambassadors, said member states had expressed solidarity with Denmark and Greenland, their sovereignty and territorial integrity.