EU Trade Policy Under Pressure
France is advocating for the European Union to activate its most potent trade defense mechanism in response to United States President Donald Trump's announcement of new tariffs on several European nations. This move by Trump is linked to his demand for the purchase of Greenland.
French President Emmanuel Macron intends to formally request the EU to deploy its anti-coercion instrument. This action follows Trump's declaration of a 10% tariff on products from eight European countries, including France, set to take effect on February 1. A source close to the French president, who wished to remain anonymous due to government protocols, confirmed that Macron would submit this request on behalf of France. Macron had previously described the tariff threat as "unacceptable" on Saturday and has been actively engaging with other European leaders regarding the situation.
Trade Deal Approval in Doubt
President Trump indicated on social media that the tariff rate would be increased to 25% in June unless a deal is reached for the "Complete and Total purchase of Greenland." This declaration has cast significant uncertainty over existing trade agreements between Washington and Brussels.
The individual familiar with Macron's stance highlighted that Trump's decision to tie tariffs to Greenland purchases raises serious concerns about a trade agreement that was finalized between the EU and the US last year. While parts of this agreement have been implemented, it still requires parliamentary approval, which now seems unlikely to proceed.
According to another source with knowledge of the matter, EU ambassadors from member states are scheduled to convene on Sunday to deliberate on the bloc's collective response.
Germany's SPD parliamentary group, a component of Chancellor Friedrich Merz's governing coalition, has called upon the European Commission to expedite the development of "concrete countermeasures" against the United States. A person involved in German planning stated that the government is currently evaluating all potential responses but has not yet determined specific actions.
Manfred Weber, the leader of the European People's Party, the largest political group within the European Parliament, declared on Saturday that approving the EU-US trade deal is no longer a viable option.
An Underutilized Trade Tool
Finnish Prime Minister Petteri Orpo issued a warning, stating that the European Union "has the means to respond," although he expressed a preference for avoiding such a confrontation. Speaking to YLE radio, Orpo announced he had requested an emergency European Council meeting to coordinate and formulate a unified strategy among European nations and Denmark.
The anti-coercion instrument has never been formally activated since its inception. It was primarily designed to deter aggressive trade practices and, when necessary, to counteract deliberate coercive actions by other countries that leverage trade policies to influence the decisions of the EU or its member states.
Potential measures under this instrument include imposing tariffs, introducing new taxes on technology companies, or implementing specific restrictions on investments within the EU. Other available options involve preventing businesses from bidding on government contracts across Europe or limiting their access to certain EU market sectors.
Last year, President Macron considered utilizing the anti-coercion tool but ultimately decided against it when the EU and the US were engaged in extensive negotiations regarding proposed tariffs.