Over the weekend, Donald Trump threatened to impose additional tariffs on a group of European countries defending Denmark’s sovereignty over Greenland. With this latest move, Trump has taken his coercive trade diplomacy one step further. He is no longer simply demanding one-sided trade concessions; he is now pressuring Denmark to relinquish parts of its sovereign territory and expecting others to acquiesce.
Faced with blatant threats to the integrity of an EU member state, the Union must act or risk irrelevance. To start, the €90 billion tariff retaliation package planned but never implemented last spring should be activated immediately. In parallel, the Anti-Coercion Instrument (ACI) should be triggered, giving the European Commission a wide range of tools to respond to further US actions.
Ideally, the threat of tariffs would force Trump to the negotiating table. This is unlikely, and even when imposed the effects of tariffs are slow to materialise. The ACI must therefore be on the table to enable additional measures should Trump not relent. Contrary to popular belief, this need not take too long. With sufficient member-state support, the ACI can be mobilised quickly.
US policymakers have grown accustomed to the EU buckling under pressure. If the Union wants to be treated as a serious negotiating party, counterpressure will have to be felt. Last summer, the EU folded to US trade pressure and accepted a fundamentally unbalanced trade agreement. Without imposing any countermeasures against the US, EU leaders folded to US demands, fearing that opposing Trump would harm fragile EU economies, push Trump to abandon Ukraine, withdraw from NATO, or all of the above. As we warned then, capitulating would only spur Trump to come back for more.
Like a schoolyard bully, Trump senses weakness. It is no surprise that he now resorts to the same measures that worked last time. He remembers the disunity of the EU27 and how key industries lobbied against any trade conflict with the US – limited or not. From his perspective, there is little downside in applying pressure to the EU, which will surely fold quickly.
Now is the time to show Trump he has overplayed his hand. If the EU cannot stand up to threats to its member states’ territorial integrity – even through commercial instruments – then claims that the EU is done as a geopolitical actor will ring true.
There is no strategic autonomy in passively accepting attempts to carve up the Union’s periphery. This episode marks a turning point. Will Europe rise to the occasion?
Varg Folkman is a Policy Analyst at the European Policy Centre Europe’s Political Economy Programme.
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