This is What the EU’s Trade Bazooka Was Meant For

In just the last few days, U.S. President Donald Trump has reiterated his determination to take over Greenland, announced a 10 percent tariff on NATO allies who disagree with his will and threatened a 200 percent tariff on French wine because French President Emmanuel Macron refused a seat on his “Board of Peace” meant to oversee Gaza’s reconstruction.

But for once, the EU isn’t chasing behind events.

Indeed, the Anti-Coercion Instrument (ACI) that the EU may use in response to Trump’s repeated threats over Greenland is ready. Introduced in 2023 with the support of all 27 member countries, the ACI — although nicknamed the “bazooka” — is a framework for negotiation in situations where a third country seeks to pressure the EU or a member country into a particular choice by applying — or threatening to apply — measures affecting trade or investment. It enables the EU to deter coercion and, if necessary, respond to it.

Before any action is implemented, the EU will first engage in consultations with the coercing third country — in this case, the U.S. And at any rate, whatever steps the bloc may eventually introduce will be compatible with international law. So, nothing as abrupt, unpredictable and arbitrary as some decisions the current U.S. administration has taken in relation to Europe.

It is unlikely that when crafting this instrument, EU legislators had such a variety of coercion cases in mind — or that they would come from the American president. It is worth noting, however, that Trump’s actions and threats meet all five of the conditions set out in the ACI to determine if economic coercion is taking place.

And having for once been prescient in endowing itself with a policy instrument in line with the times, it would be irresponsible and cowardly if the EU were to give up just because the coercion at hand is heavy and, unexpectedly, comes from the most powerful third country in the world — whether friend or foe, only history will tell.

In line with the ACI, the countermeasures the EU may decide to take after consultations could involve tariffs — including suspending the ratification of last July’s trade agreement — restrictions on trade in services and certain aspects of intellectual property rights, or restrictions on foreign direct investment and public procurement. 

In view of the potential impact of current U.S. financial policy, it would also make sense for the bloc’s financial institutions to review their resilience with respect to developments that might intervene in the U.S. financial landscape as a result of current economic policies and the relaxation of supervisory rules.

The regulation has another interesting feature: It can create links between the EU and other countries affected by the same or similar coercion. The idea being that when a dominant power tends to follow the principle of divide et impera, it may be wise for its designated prey, both within and outside the EU, to seek a coordinated response.

The fact of the matter is, if the EU sidesteps the ACI and genuflects, Trump will feel encouraged to be even more disrespectful toward Europe than he already is; the EU will lose all credibility as a moderate but forceful player in a world of autocrats; and European citizens will be even more disillusioned with European institutions unwilling to protect them and their dignity. It could also make them more likely to seek protection from nationalist parties and governments — those that may well be against triggering the ACI in the first place, devout as they are to Trump’s hostility toward the EU.

Many in Europe are, indeed, adopting an attitude of subordinate acceptance when it comes to Trump’s wishes, either because of ideological affinities or because they feel more comfortable being close to those in power — as political theorist Etienne de La Boétie stated in the 16th century, servitude is generally based on the “voluntary” acceptance of domination.

Then there are those who are ready to align with Trump invoking Realpolitik — a group that seems to have forgotten that 80 years of peace since World War II provide a clear reading of reality in which peace and prosperity are better safeguarded through cooperation than the use of force. History’s judgement on that is clear.

Finally, there are also EU leaders who, when siding with the U.S. over European interests, are driven by the intention of preserving the West’s or NATO’s unity. But while this may be a laudable intention, they’re falling blind to the fact that, in the last year, most of the breaches of this unity have come from the American side.

To be sure, much of Europe’s reluctance to engage with Trump in a less subordinate manner has a lot to do with the continent’s weakness in defense and security. The U.S. is right in asking Europe to bear a higher proportion of that burden, and Europe does need to step up its preparedness. But the readiness of many to accept virtually any demand, or coercion, because the U.S. may otherwise withdraw its security umbrella from Ukraine or EU countries is no longer convincing.

Much is made of the NATO Treaty’s Article 5 providing a collective security guarantee. However, the credibility of this guarantee relies on shared values and mutual respect. And with Trump constantly displaying his adversarial and contemptuous feelings toward Europe — seemingly more aligned with Russian President Vladimir Putin — how much can the continent really count on the U.S. umbrella in case of Russian intervention? What price should the EU be ready to pay, in terms of foregone sovereignty, to hold onto a guarantee that may no longer exist?

Moreover, a Europe less acquiescent to Trump’s requests would be a strong signal to the many Americans who still believe in rule of law and the multilateral order. When Alexis de Tocqueville traveled to the U.S. in the 1830s to study the young democracy, he was impressed by the strength of its civil society and institutions — at the same time, he feared “the tyranny of the majority.” And one might wonder whether a system where the winner of an election can govern with no respect for the country’s institutions, violating the independence of its judicial system and central bank, is still a model of democracy.

After World War II, the U.S. contributed generously to the relaunch of the European economy. It also massively influenced new democratic institutions in Germany and the nascent European Community. Maybe now it’s Europe’s turn to give something back and defend these values — and that means taking action. This is, after all, what the ACI was meant for.

This article was originally published by Politico.eu