European leaders are weighing possible countermeasures after the White House threatened new tariffs tied to Greenland, with EU officials considering whether to use the bloc’s anti-coercion instrument to respond to what they called economic pressure.
The escalation began after U.S. President Donald Trump said Saturday that he would impose a 10% import tax starting in February on goods from eight European nations because of their opposition to American control of Greenland. Trump said the rate would rise to 25% on June 1 if no deal is in place for what he called “the Complete and Total purchase of Greenland” by the United States.
In his remarks posted while at his golf club in West Palm Beach, Florida, Trump named Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland as tariff targets. European leaders from Dublin to Helsinki condemned the announcement as economic coercion and sent representatives to Brussels on Sunday for an emergency meeting as the standoff unfolded.
European Commission spokesperson Olof Gill said the EU’s priority is to engage rather than escalate. “Our priority is to engage, not escalate. Sometimes the most responsible form of leadership is restraint,” Gill said on Monday, adding that the EU has tools to respond if the threatened tariffs are imposed: “The EU has tools at its disposal and is prepared to respond should the threatened tariffs be imposed.”
The timing of the dispute overlapped with international travel, and leaders were also preparing for negotiations connected to the World Economic Forum in Davos. No meetings were scheduled yet between European leaders and Trump, the report said, and after Davos, the 27 EU leaders were set to convene in Brussels Thursday evening for another emergency meeting on transatlantic relations.
European Council President António Costa said EU leaders agreed “that tariffs would undermine transatlantic relations and are incompatible with the EU-U.S. trade agreement,” and he said they expressed “readiness to defend ourselves against any form of coercion.” U.S. Treasury Secretary Scott Bessent, speaking Monday to reporters in Davos, suggested EU officials had been reaching out to the administration, saying “evidently there are a lot of inbounds.” Asked about retaliatory measures, Bessent said: “I think it would be very unwise.”
Officials and analysts said the EU has multiple ways it could respond economically, but the path is politically and economically difficult. Penny Naas of the German Marshall Fund said it is “tough for the Europeans to find that space where they can both demonstrate strength without incurring significant retaliation,” arguing that “as long as they’re unwilling to accept retaliation, they’re going to have trouble projecting strength.”
The report described three major economic tools the EU could use to pressure Washington: new tariffs, suspension of the U.S.-EU trade deal, and the bloc’s Anti-Coercion Instrument, which could sanction individuals or institutions found to be applying undue pressure. The EU and the U.S. agreed in June on a framework for a trade deal that was expected to be ratified by the European Parliament this week, but Manfred Weber, leader of the largest European Parliament group, said approval was “not possible at this stage” on Saturday.
The EU could also levy tariffs on U.S. goods worth 93 billion euros that were suspended after the July trade deal. Gill said those levies would take effect on Feb. 7 if the U.S. follows through on the tariff threat, unless the suspension is extended. Ireland’s finance minister Simon Harris cautioned against escalation ahead of a meeting of the EU’s finance ministers, saying: “This is a time for cool heads,” and warning that moving away from the trade agreement could have “very, very significant consequences” for economic activity across the Atlantic.
Europe’s biggest exports to the U.S. include pharmaceuticals, cars, aircraft, chemicals, medical instruments, and wine and spirits, the report said. It also noted that the Anti-Coercion Instrument was created in 2021 after Beijing restricted trade to Lithuania, amid Lithuanian ties with Taiwan, which China claims as its territory.
The commission statement quoted in the report said the instrument’s primary purpose is deterrence: “The primary objective of the ACI is deterrence. The instrument will, therefore, be most successful if there is no need to use it,” according to the European Commission. The report said fears of escalation have contributed to reluctance in some EU capitals, though France and Germany have signaled support, including through statements by French President Emmanuel Macron.
Macron posted that “Tariff threats are unacceptable and have no place in this context,” and he said, “Europeans will respond in a united and coordinated manner should they be confirmed. We will ensure that European sovereignty is upheld.” In parallel, Brussels has been pursuing trade links outside the U.S., including a massive trade deal with the Mercosur nations signed last week and separate agreements with Indonesia and Japan, the report said, with work underway on deals with the United Arab Emirates and India.
Gill said the India agreement would cover nearly 2 billion people and, together with the Mercosur deal, offered what he described as a clear EU victory in the wake of global economic chaos. He added: “We can see very clearly that the value of responsible, mature leadership on the global stage is paying off in terms of the EU trade agenda, in terms of our efforts to diversify our trade partners and give ourselves the maximum economic potential from our partnerships around the globe.”