All tools are on the table when it comes to getting the USA to back down from threats of tariffs and the takeover of Greenland.
So says EU Commissioner for the Economy Valdis Dombrovskis.
The statement comes on the way into the meeting of the countries in the Eurogroup on Monday in Brussels.
“We have tools at our disposal. Right now nothing has been taken off the table,” says Dombrovskis.
The EU has already prepared counter-tariffs of 93 billion euros on American goods in connection with the trade agreement this summer.
Those tariffs can quickly be activated as a first step.
That corresponds to American goods worth around 690 billion Danish kroner that could be hit by European counter-tariffs.
France’s president, Emmanuel Macron, however, wants to hit Trump significantly harder.
Macron is now arguing for activating the EU’s hitherto never used anti-coercion instrument.
It is also called the EU’s “trade bazooka,” because it is the most far-reaching economic measure the EU can take against a third country.
It can be adopted in two rounds with a qualified majority. Thus, for example, Hungary cannot block it.
The first step is for the EU to determine that there is an attempt at “economic coercion” against a member state.
The assessment in Brussels is that this criterion has been met. Not least after Trump’s latest threats of tariffs on European countries.
The next step is for the leaders of the EU countries to decide what the “bazooka” should specifically target.
That is what the finance ministers of France and Germany are to discuss on Monday, the French administration stated over the weekend.
In the most far-reaching version, Europe can choose to completely exclude American suppliers from the EU.
That could, for example, be American digital giants such as Microsoft, Google and Amazon.
The problem is that at the same time it could partially paralyze European companies.
The three companies in fact dominate the European market for cloud solutions, where the USA accounts for around 70 percent of the market in Europe
That is one of the reasons why Europe would prefer a diplomatic solution.
“It must be emphasized that the EU remains in solidarity with the Kingdom of Denmark, with Greenland and their populations. We will protect the principle of sovereignty, territorial integrity for EU countries and also for Greenland. The threats of tariffs are not acceptable as a way to handle this issue,” says Valdis Dombrovskis.
He emphasizes that the goal is to avoid a tariff war between the EU and the USA over Greenland.
“We must remember that the Transatlantic Trade and Investment Partnership is the largest in the world. So there is a lot to lose economically. Both for Europe, but also for the USA and for the USA’s companies and employees.
Therefore we must work to find a constructive solution that respects international law and also takes into account our important economic and geopolitical relations,” says Valdis Dombrovskis.
Thus, for the time being, the EU is heading down the same wait-and-see track that also characterized the negotiations leading up to the trade agreement this summer.
That ended with 15 percent American tariffs on European goods.
Question: If the EU does not show strength towards Trump now, how can anyone then take the EU seriously as a geopolitical actor?
“That is of course an important point. That is why I also emphasize that we must have respect for international law and work to protect the economic interests of Europe and the USA. There are intensive consultations right now, and later in the week there is an EU summit where we will discuss the issue and decide what the EU’s response should be,” says Valdis Dombrovskis.
