Donald Trump’s warning that the United States could impose new tariffs on eight European countries unless they back his proposal to buy Greenland has prompted governments and EU officials to assess how Europe could respond if the measures take effect.
The US president said on Saturday that a 10% levy on imports from the eight countries would begin on 1 February, rising to 25% from the summer if no agreement is reached. It remains unclear whether the proposed tariffs would be added on top of existing duties.
Immediate European Reaction
France and Germany, which are among the eight countries alongside the UK, Denmark, Norway, Sweden, the Netherlands and Finland, said the European Union should be ready to respond if the US proceeds. The warning came less than six months after Washington and Brussels reached an agreement intended to steady transatlantic trade.
That earlier deal followed talks between Trump and European Commission President Ursula von der Leyen in Scotland, where the EU accepted tariffs of 15% on goods it sells to the US, lower than the 30% initially proposed by Washington. In parallel, Brussels had prepared a retaliatory tariff package covering €93bn worth of US exports, including livestock, aircraft parts and whiskey, to be activated if talks collapsed.
Those measures were suspended after the agreement, and the European Parliament was due to ratify the deal next week. Within hours of Trump’s latest threat, however, senior German MEP Manfred Weber said approval was no longer possible under the circumstances.
Risk Of Automatic Tariffs
If the EU does not ratify the deal or extend the suspension, tariffs on billions of euros worth of American goods are set to take effect on 7 February. That outcome could trigger political pressure in the US from exporters affected by the levies.
The European Commission said imposing tariffs on only some EU member states would be technically possible but difficult to administer, given how often goods cross internal EU borders before being shipped to the US.
Commission spokesperson Olof Gill said Brussels would do everything necessary to protect EU economic interests, while cautioning that tariffs would harm businesses and consumers on both sides of the Atlantic.
The Anti-Coercion Instrument Option
One of the strongest tools available to the EU is the Anti-Coercion Instrument, often referred to as the trade bazooka. The law allows the bloc to respond to economic pressure from non-EU countries that attempt to influence what it considers the legitimate sovereign choices of the EU or its members.
The instrument permits a wide range of responses, including tariffs, import and export restrictions, limits on services trade, and reduced access to banking and capital markets. It can also allow the EU to restrict access to large parts of the single market while setting aside existing international agreements.
EU officials have stressed that this option is designed primarily to encourage negotiations rather than to be used quickly. Under current rules, the commission can take up to four months to investigate alleged coercion, followed by up to six months of talks with the country involved. Member states then have up to 10 weeks to approve any retaliatory steps, meaning a full response could take close to a year.
UK Position And Other Levers
UK Prime Minister Sir Keir Starmer said on Monday that he wanted to avoid a trade conflict with the US and ruled out immediate retaliatory tariffs. He said using trade taxes against allies was not appropriate but added that a tariff war would serve no one’s interests.
The UK and EU could consider other measures if talks fail. One option would be changes to the UK’s Digital Services Tax, which currently charges a 2% levy on large technology firms with global sales above £500m and UK revenues exceeding £25m. An increase could affect major US companies such as Amazon and Meta.
Legal Uncertainty In The US
Questions also remain about the legal basis for some of Trump’s tariff plans. The US Supreme Court is expected to rule on whether the president exceeded his authority by using the International Emergency Economic Powers Act to impose earlier trade taxes.
That case includes tariffs introduced last year that require American importers of certain British goods to pay a 10% charge when products arrive in the US.
Featured image credits: Flickr
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