All options are under consideration regarding the USA’s threats of tariffs and the potential takeover of Greenland, according to EU Commissioner for the Economy, Valdis Dombrovskis.
This remark was made ahead of the Eurogroup meeting in Brussels on Monday.
“We have tools ready. At this moment, nothing is off the table,” stated Dombrovskis.
The EU has already devised counter-tariffs amounting to 93 billion euros on American products related to the trade agreement established this summer.
These tariffs can be quickly implemented as an initial measure.
This equates to American products valued at approximately 690 billion Danish kroner that could face European counter-tariffs.
French President Emmanuel Macron, however, is advocating for a stronger response against Trump.
Macron is now pushing for the activation of the EU’s unused anti-coercion mechanism.
This mechanism, often referred to as the EU’s “trade bazooka,” represents the most extensive economic action the EU can take against a non-EU country.
The process can be approved in two phases with a qualified majority, preventing any single country, such as Hungary, from blocking it.
The first phase involves the EU determining whether there has been an attempt at “economic coercion” against a member state.
Brussels assesses that this condition has been fulfilled, particularly following Trump’s recent tariff threats against European nations.
The next step requires EU leaders to decide what specifically the “bazooka” will target.
This discussion is set for Monday among the finance ministers of France and Germany, as indicated by the French administration over the weekend.
In the most extreme scenario, Europe could opt to entirely exclude American suppliers from the EU.
This could include major American digital companies like Microsoft, Google, and Amazon.
However, such a move could partially cripple European businesses, as these three companies dominate the European cloud solutions market, controlling around 70 percent of it.
This dependence is one reason Europe would prefer to pursue diplomatic resolutions.
“The EU stands in solidarity with the Kingdom of Denmark, Greenland, and their populations. We will uphold the principles of sovereignty and territorial integrity for EU member states and Greenland. The use of tariff threats to address this matter is unacceptable,” said Valdis Dombrovskis.
He stressed the importance of averting a tariff war between the EU and the USA over Greenland.
“It’s crucial to recognize that the Transatlantic Trade and Investment Partnership is the largest globally, thus presenting significant economic risks for both Europe and the USA, including for American companies and workers,” noted Valdis Dombrovskis.
Therefore, the focus remains on finding a constructive solution that adheres to international law and considers critical economic and geopolitical ties.
For now, the EU is adopting a cautious approach, similar to the one observed during negotiations leading to the trade agreement this summer, which resulted in a 15 percent tariff on European goods from the USA.
Question: If the EU fails to demonstrate strength against Trump now, how can it be considered a serious geopolitical player?
“That is indeed a significant concern. Hence, I emphasize the importance of respecting international law and protecting Europe’s and the USA’s economic interests. Intensive discussions are ongoing, and later this week, there will be an EU summit to deliberate on the issue and determine the EU’s course of action,” stated Valdis Dombrovskis.
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