The European Union is poised to deploy its formidable ‘Anti-Coercion Instrument’ (ACI), a new trade defence mechanism likened to a “nuclear weapon,” in the event of a trade dispute with a potential future US administration led by Donald Trump.
The bloc is specifically eyeing retaliation against key American service sectors, investment flows, product quotas, and US companies’ participation in EU public procurement, should a comprehensive trade agreement prove elusive.
The ACI is primarily conceived as a deterrent, granting the EU’s 27 member states sweeping powers to respond to what it deems as economic coercion by third countries like the United States.
Beyond traditional import tariffs on goods, this comprehensive tool allows for a broad spectrum of restrictive measures on both imports and exports, including the imposition of quotas or licensing controls.
In the substantial realm of EU public procurement, which accounts for approximately €2 trillion annually, Brussels has two potent options for reprisal:
Disqualification of Bids: Proposals found to utilise US goods or services for more than 50% of the contract’s value – particularly in large-scale projects such as construction or defence procurement – could be entirely barred from the tendering process.
Disadvantageous Scoring: Bids from American firms could face “score penalties,” significantly reducing their chances of securing contracts, even if otherwise highly competitive.