EU Plans Counter-Tariffs Worth 93 Billion Euros in Response to Trump's Greenland Threats

Summary

The European Union is planning counter-tariffs worth 93 billion euros in retaliation against special tariffs threatened by US President Donald Trump in the conflict over Greenland. EU Council President António Costa announced a special summit for the second half of the week. The EU is also considering the first-time activation of the Anti-Coercion Instrument (ACI), which functions as a "trade bazooka". The goal is to find an amicable solution with Trump without immediately building massive pressure.

Persons

• António Costa – EU Council President
• Ursula von der Leyen – EU Commission President
• Donald Trump – US President
• Friedrich Merz – Federal Chancellor

Topics

• Trade tariffs and trade conflicts
• Transatlantic relations
• Greenland conflict
• EU counter-tariff measures
• Anti-Coercion Instrument (ACI)

Detailed Summary

The European Union is preparing for an escalating trade conflict with the USA. The background is the special tariffs threatened by US President Donald Trump against Germany and seven other European countries if Greenland is not sold to the USA. These tariffs are to be ten percent starting February 1st and are to increase to 25 percent starting June 1st. Affected countries besides Germany are Denmark, Norway, Sweden, France, Finland, the Netherlands, and Great Britain.

In retaliation, the EU is reviewing the reinstatement of counter-tariffs worth 93 billion euros, which were originally decided in the tariff dispute last summer but were then suspended. These could automatically take effect again on February 6th unless the EU extends the suspension. The affected US goods include bourbon, aircraft parts, soybeans, and jeans, among others.

On Sunday, the EU ambassadors of the 27 member states discussed two response options in Brussels: the automatic reinstatement of counter-tariffs or making market access more difficult for American companies. EU Council President António Costa announced a special summit "in the coming days" after the meeting, which is expected to take place on Thursday – one day before Trump's appearance at the World Economic Forum in Davos.

Another instrument under discussion in the EU is the Anti-Coercion Instrument (ACI), which has been in force since late 2023 and is colloquially referred to as the "trade bazooka". This option has not yet been activated. The instrument would provide the European Commission with a broad arsenal of countermeasures, ranging from exclusion of companies from public contracts to selective trade restrictions to bans on investments from the affected countries and suspension of patent rights.

The EU statement led by Costa emphasizes the unity of member states in their support for Denmark and Greenland. It criticizes the planned tariffs as a violation of the tariff agreement from last summer and rejects any form of extortion. At the same time, the EU signals willingness to negotiate. The European Parliament will postpone ratification of the tariff deal for now – a signal to Trump that the EU is showing its determination without immediately building maximum pressure.

Key Takeaways

• The EU is planning 93 billion euros in counter-tariffs on US goods in retaliation for Trump's tariff threats
• The Anti-Coercion Instrument could be activated for the first time in EU history
• An EU special summit will take place in the second half of the week before Trump is expected in Davos
• Counter-tariffs automatically take effect on February 6th unless the EU extends the suspension
• Target products include American bourbon, aircraft parts, soybeans, and jeans, among others
• The EU emphasizes unity and readiness to resist extortion while simultaneously signaling willingness to negotiate

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