EU readies countermeasures, including its “trade bazooka,” against US threats

BRUSSELS — Rattled by U.S. President Donald Trump’s threats over Greenland, the European Union is readying countermeasures against the United States, the Associated Press reported on Jan. 21, 2026.

Because the EU is primarily a trading bloc, the EU’s toolkit is mostly financial instruments, ranging from steep tariffs on U.S. goods to an instrument described as a “trade bazooka” that French President Emmanuel Macron had touted.

What the EU calls its “trade bazooka” is shorthand for the bloc’s Anti-Coercion Instrument, or ACI. The term is used to describe a set of measures meant to block or restrict trade and investment from countries found to be putting undue pressure on EU member nations or on EU-based companies.

The ACI’s possible measures include curtailing the export and import of goods and services. The instrument could also bar countries or companies from EU public tenders, or limit foreign direct investment.

In its most severe form, the ACI would effectively close off access to the EU’s 450-million-customer market, a step that the AP said could inflict billions of dollars of losses on U.S. companies and the American economy.

The ACI was established by the European Commission in 2021 after China restricted trade to Lithuania over its ties with Taiwan, which Beijing claims as its own territory. A commission statement issued ahead of the dispute over Greenland said the “primary objective of the ACI is deterrence” and that the instrument “will, therefore, be most successful if there is no need to use it.”

The EU would not be able to apply the instrument immediately. The AP report said it would take at least six months to activate the ACI.

The stakes for both sides are tied to the size of transatlantic commerce. The AP report cited EU statistics agency Eurostat in saying EU-U.S. trade in goods and services totaled 1.7 trillion euros (about $2 trillion) in 2024, or an average of 4.6 billion euros a day.

The report said the EU’s biggest exports to the U.S. include pharmaceuticals, cars, aircraft, chemicals, medical instruments, and wine and spirits. It also said the U.S.’s biggest exports to the bloc include professional and scientific services such as payment systems and cloud infrastructure, oil and gas, pharmaceuticals, medical equipment, aerospace products and cars.

— Associated Press writer Sylvie Corbet in Paris contributed to the report.