EU Considers Triggering Anti-Coercion Measures Against U.S. Amid Trade Tensions

 A growing number of European Union member states, including Germany, are reportedly weighing the use of wide-ranging “anti-coercion” measures targeting the United States, should negotiations on a new trade deal with President Donald Trump’s administration fail. According to EU diplomats, the bloc’s Anti-Coercion Instrument (ACI) — a powerful but so far unused tool — could soon be invoked as tensions escalate over proposed U.S. tariffs.

What Is the Anti-Coercion Instrument?

The ACI, which officially came into force at the end of 2023, empowers the EU to respond decisively to economic intimidation by third countries. Designed primarily as a deterrent, the instrument allows the EU to take retaliatory action far beyond conventional trade tariffs, marking it as a strategic “last resort” — often referred to as the bloc’s “nuclear option.”

Potential Measures Under the ACI

The ACI permits the EU to counteract economic pressure tactics with a broad spectrum of retaliatory measures. In light of President Trump’s threat to impose a 30% tariff on EU imports by August 1, EU officials are examining the following responses:

• Tariffs and Quotas: In addition to reciprocal tariffs, the ACI allows for quotas or licensing restrictions on imports and exports.

• Public Procurement Restrictions: U.S. firms could be barred from bidding on EU public tenders — a market worth approximately €2 trillion annually — if their goods or services account for over 50% of a bid. Alternatively, the EU may impose penalty scores to disadvantage U.S. proposals.
  
  
• Digital Services Impact: The ACI could target American digital service giants such as Amazon, Microsoft, Netflix, and Uber, where the U.S. holds a trade surplus with the EU.
  
  
• Investment Controls: Foreign direct investment from the U.S. — the EU's largest investor — could be limited or subjected to increased scrutiny.
  
  
• Regulatory Measures: Further actions could include restrictions on intellectual property rights protection, market access for U.S. financial services, and the sale of American chemicals or food products within the EU.

The ACI mandates that any countermeasures must be both effective and proportionate — designed to halt coercive behavior and address any resulting harm.

Invocation Process: A High Threshold

The ACI was originally proposed in 2021, amid growing concern over the use of economic coercion by global powers including China and the United States. Notably, Lithuania had earlier accused Beijing of punitive trade actions following the establishment of a de facto Taiwanese embassy in Vilnius.

Under the mechanism:

• The European Commission has up to four months to assess whether coercion has occurred.
  
  
• If confirmed, EU member states then have 8 to 10 weeks to approve the finding through a qualified majority vote.
  
  
• The Commission would then attempt diplomatic engagement with the country in question. Should negotiations fail, the EU may proceed to implement response measures — again requiring member state approval.

Although the entire process could span up to 12 months, expedited procedures are available if urgent action is warranted.