European leaders are hastily discussing how to respond to President Trump’s threat to annex Greenland. Time is running out fast, with Mr Trump due to appear at the Davos Forum on Wednesday. Europe has some previously unthinkable measures up its sleeve, including the ’trade bazooka’—but it is uncertain whether it will dare to use them.
Europe will not allow itself to be blackmailed and is preparing for unified countermeasures in case the United States imposes tariffs on selected EU members over Greenland. German Finance Minister Lars Klingbeil said this at a press conference early on Monday, 19 January, held together with Mr Klingbeil’s French counterpart Roland Lescure.
According to Mr Klingbeil, the existing customs agreements with the United States are “on hold”. French Finance Minister promised reporters that the response to any new US tariffs would be “unified and coordinated”. Mr Lescure also called on the EU not to be afraid to use the so-called anti-economic coercion tool nicknamed ’trade bazooka’.
Additional US tariffs as latest escalation
Monday’s statements by the German and French ministers are just the latest piece in a mosaic that many observers see as the worst crisis in relations between the European Union and the US in decades. It was triggered by US President Trump’s earlier claim to Greenland, which is an autonomous part of the Kingdom of Denmark.
The existing customs agreements with the United States are “on hold.” – German Finance Minister Lars Klingbeil
In recent weeks, Mr Trump has repeatedly threatened that the US “must acquire Greenland” for strategic reasons. The US president has not ruled out the use of force to achieve this goal. He also stated several times that he is prepared to “purchase Greenland” from Denmark.
The latest escalation in the Greenland crisis occurred over the weekend when Mr Trump announced that he intended to impose an additional 10 per cent trade tariff on Denmark, Sweden, France, Germany, the Netherlands, Finland, Norway, and the United Kingdom starting February 1. According to the US President, these countries opposed his desire to acquire Greenland. Mr Trump also criticized the above mentioned countries for having sent soldiers to Greenland on a reconnaissance mission at Denmark’s invitation. According to Mr Trump, the tariff is to remain in place until the US concludes an agreement to purchase Greenland from Denmark.
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Since Denmark, like the US, is a member of NATO, experts are talking about an unprecedented escalation between two members of this military alliance.
Will be ’trade bazooka’ activated?
European countries are now feverishly discussing a coordinated response to Trump’s threats. Council President António Costa has decided to convene an extraordinary EU summit in the coming days due to the latest developments surrounding Greenland and in connection with the threats made by US President Donald Trump. The precise date has not yet been set.
Over the weekend, previously unimaginable considerations about the use of a special tool called anti-coercion instrument (ACI) against the US as a form of retaliation. ACI is a powerful tool adopted in 2023 that allows the EU to punish unfriendly countries for ’economic blackmail’ by limiting trade licenses and possibly also by shutting off access to the single market.
ACI has never yet been used by the Union. In case of ACI possible use, EU member states would decide by qualified majority whether to activate the instrument or not.
In practical terms, there is no time to waste. European leaders are set to meet Trump on Wednesday, January 21, at the World Economic Forum in Davos.
