EU prepares €93bn tariffs against US in response to Trump's Greenland pressure – FT

The European Union is preparing a package of tough measures in response to threats by US President Donald Trump regarding his intention to assert control over Greenland. Brussels is considering imposing tariffs on US goods worth a total of €93 billion or restricting access for American companies to the EU's single market.

Source: Financial Times, citing European officials and diplomats

Details: Financial Times said that the situation has escalated into the most serious crisis in transatlantic relations in decades. Possible responses to Trump's threats were discussed by the ambassadors of the EU's 27 member states in order to equip European leaders with leverage ahead of key meetings with Trump at the World Economic Forum in Davos, which begins this week.

Officials involved in the preparations say the EU is developing "retaliation instruments" with two main elements. The first is the reactivation of a €93 billion tariff list that was drawn up last year but suspended until 6 February to avoid a full-scale trade war.

The second, more far-reaching option is the use of the so-called Anti-Coercion Instrument (ACI). Adopted in 2023, the mechanism has never been used before. It allows the EU to restrict investment and block the export of services, measures that could significantly affect major US technology companies operating in the European market.

France has been the strongest advocate of using the ACI. Paris and Berlin are already coordinating a joint response, and the two countries' finance ministers are planning a meeting ahead of a broader EU discussion. Meanwhile, most EU member states favour attempting dialogue with Trump before moving towards open confrontation, using what officials describe as a carrot and stick approach.

"There are clear retaliation instruments at hand if this continues... [Trump's] using pure mafioso methods. At the same time we want to publicly call for calm and give him an opportunity to climb down the ladder," said a European diplomat familiar with the talks.

Another European official said Trump's threats "certainly warrant the ACI as it would be textbook coercion".

As a warning step, the largest political groups in the European Parliament have decided to postpone a vote on lowering tariffs on US goods that had been planned under previous agreements.

European Commission President Ursula von der Leyen said on Sunday 18 January that Europe will "stand firm in our commitment to uphold the sovereignty of Greenland and the Kingdom of Denmark. We will always protect our strategic economic and security interests."

In Davos, the agenda of a meeting of Western national security advisers was urgently revised. Instead of focusing exclusively on peace talks regarding Ukraine, a significant part of the discussions will now be devoted to the crisis surrounding Greenland.

US Treasury Secretary Scott Bessent dismissed the possibility of compromise, saying Europe was too weak to guarantee the island's security.

"The president believes enhanced security is not possible without Greenland being part of the US," Bessent said.

Background:

• On 14 January, Trump demanded that the US acquire Greenland, calling it a strategic necessity, and criticised European countries for deploying military forces to protect the island.
• On 18 January, ambassadors of EU member states held an emergency meeting to discuss Trump's announcement of new tariffs against several European countries.
• Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and the UK stated that threats of tariffs from Trump are undermining transatlantic relations.
• Spanish Prime Minister Pedro Sánchez warned that the implementation of Trump's claims on Greenland would make Russian leader Vladimir Putin "the happiest man in the world", delivering him two victories at once.

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