Trump increases pressure on Greenland, and the EU considers taking "tough trade measures."

On January 18, EU ambassadors reached a broad agreement to intensify efforts to dissuade US President Donald Trump from imposing tariffs on European allies, while also preparing retaliatory measures should the US president follow through on his threats. This agreement came as Trump announced that all goods from eight NATO countries would face a 10% tariff starting February 1st, until the US was allowed to purchase Greenland. Major EU member states condemned the move as blackmail. Trump stated that if an agreement to purchase Greenland was not reached, the tariffs would increase to 25% on June 1st.

Firstly, French President Macron, in multiple exchanges with European leaders, had suggested using the EU's anti-coercion mechanism to counter the US. Macron reiterated to other European leaders the importance of a firm and coordinated European response. Irish Prime Minister Micheál Martin said that while the EU would certainly retaliate, activating the mechanism now was "a bit premature."

Secondly, in May 2025, the EU had indicated that it would impose tariffs on $107 billion worth of US imports after Trump announced comprehensive tariff increases. However, after Trump reached an agreement with the ambassadors, the EU suspended the tariff increases for six months. According to Euronews, the proposed tariffs focused on industries in Republican-leaning states, such as bourbon whiskey, aircraft parts, soybeans, and poultry. The EU has not yet approved the agreement, and lawmakers in Brussels have indicated that renewed threats regarding Greenland would prevent its approval. However, as a first line of defense, the tariff plan appears to have broader support than other anti-coercion measures, which have received a "very mixed" response.

Currently, eight NATO member states, including Denmark, stated in a joint statement that Trump's latest tariff measures pose a danger to transatlantic relations. These countries said that the tariff threats undermine transatlantic relations and could lead to a dangerous vicious cycle. According to the text of the regulation, the EU's anti-coercion instrument (also known as the "trade bazooka"), adopted in 2023, aims to prevent and eliminate "situations of economic coercion." The regulation stipulates that "its main purpose is to deter economic coercion against the EU or its member states and to enable the EU, as a last resort, to counteract economic coercion through EU countermeasures." This tool allows the EU to restrict or stop imports of goods and services into its market, impose restrictions on foreign investment and intellectual property, and take other retaliatory measures. The European Commission notes that any action taken against a country must be "proportionate to the damage caused," and the range of potential measures is designed to be as broad as possible to allow for the selection and design of effective and efficient countermeasures to address individual cases of economic coercion, while minimizing or avoiding impact on the EU economy.

Regarding the deployment timeline, according to the relevant regulations, once a country is accused of coercive behavior, the European Commission has up to four months to review the accusation. After the investigation, the subsequent procedure must be approved by a majority of EU member states. Once the mechanism is activated, the EU will negotiate with the accused country. If negotiations fail, the EU can take retaliatory measures. This tool has not been used since its adoption.

Furthermore, activating the anti-coercion mechanism would cause significant damage to trade relations between the EU and the US, and is considered a "nuclear option" in response to Trump's tariffs. By 2024, trade between the US and the EU will be close to $2 trillion, accounting for nearly 30% of global trade and 43% of global GDP. The EU and the US have the world's largest bilateral trade and investment relationship, as well as the most closely integrated economic relationship.

In general, the EU has temporarily avoided a more intense trade conflict through this agreement, achieving short-term stability. However, this is a "truce agreement" achieved through significant concessions, and many core contradictions remain unresolved, sowing seeds of uncertainty for future transatlantic trade relations.