Trump’s Greenland tariff threat has EU reaching for its ‘Big Bazooka’: What is Europe's most powerful trade weapon

This photograph shows European Union flags outside the Berlaymont building, the headquarters of the European Commission, in Brussels on December 15, 2025. (Photo by Nicolas TUCAT / AFP)

As Trump threatens tariffs over Greenland, the EU considers using its Anti-Coercion Instrument, a powerful trade tool allowing broad retaliation against economic pressure. Debate continues within the EU on deploying it, highlighting strained US-Europe relations.

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As US President Donald Trump escalates pressure on Europe over Greenland with sweeping tariff threats, the European Union is weighing a response that was never designed with Washington in mind. Known informally as the “big bazooka,” the EU’s Anti-Coercion Instrument is its most powerful trade weapon. It allows Brussels to retaliate against countries that use tariffs or economic pressure to force political or strategic concessions.

With Trump openly linking tariffs on European nations to Denmark’s refusal to sell Greenland, EU officials now find themselves considering whether to activate a tool meant to deter exactly this kind of coercion.

What is the Anti-Coercion Instrument

The Anti-Coercion Instrument, or ACI, is a European Union regulation that came into force on December 27, 2023. Its official purpose is to protect the EU and its 27 member states from economic coercion by foreign governments.

Economic coercion, under EU law, means applying or threatening trade or investment measures to influence the sovereign decisions of a country. The ACI was developed after China imposed informal trade barriers on Lithuania when Vilnius deepened ties with Taiwan.

Because of its sweeping powers, EU officials and lawmakers often refer to the ACI as the “big bazooka” or “trade bazooka”.

How the ACI works

The process begins with an investigation by the European Commission. This can be triggered by a formal complaint from a member state or initiated by the Commission itself. The Commission must determine whether coercion is taking place, usually within four months.

If coercion is confirmed, the EU Council decides whether to proceed. The Commission then asks the country involved to stop its actions and opens talks to resolve the dispute. These talks can include negotiations, mediation or arbitration.

If those efforts fail, the Commission is authorised to impose countermeasures.

What the EU could do to the US

If deployed, the ACI would allow the EU to take actions far beyond retaliatory tariffs. Brussels could restrict access for US companies to the EU’s single market of roughly 450 million consumers. It could impose export controls on goods sent to the US or suspend protections for American intellectual property within the EU.

The aim, according to EU rules, is to respond proportionately while limiting damage to European economies. Once the coercive behaviour stops, the EU can lift the measures and even seek compensation under international law.

However, activating the ACI requires approval from at least 55 percent of EU member states and would take several months to fully implement.

Is Europe ready to use it

Support within the EU is divided. Some officials favour an existing package of tariffs on $107.7 billion worth of US imports that could automatically take effect in early February. Others believe the ACI should remain a last resort.

France and Germany are among the strongest supporters of using the instrument. German Finance Minister Lars Klingbeil backed French President Emmanuel Macron’s call for firmness, saying Europeans must show that “the limit has been reached”.

In the European Parliament, Renew group leader Valérie Hayer was more direct. “The United States is making a miscalculation that is not only dangerous but could be painful,” she said. “The anti-coercion instrument is our economic nuclear weapon.”

Why this moment matters

Trump has announced 10 percent tariffs on several European countries starting February 1 and has threatened to raise them to 25 percent by June unless Greenland is sold to the US. European leaders see this as an unprecedented attempt to use economic pressure to force a territorial outcome.

Denmark’s Prime Minister Mette Frederiksen welcomed European unity, saying, “Europe will not be blackmailed”.

For now, the EU is trying to balance unity, deterrence and economic risk. But the mere discussion of the “big bazooka” shows how far transatlantic relations have deteriorated and how seriously Europe is taking Trump’s tariff threats.