EU Prepares Trade ‘Bazooka’ as Trump Pushes Greenland Tariffs: Tech Sector in the Crosshairs

European leaders are moving cautiously but decisively as U.S. President Donald Trump escalates pressure over Greenland, threatening tariffs of up to 25% on European imports. France has called for the EU to activate its Anti-Coercion Instrument (ACI), nicknamed the trade “bazooka,” designed to counter foreign economic blackmail. Germany’s Finance Minister and Vice Chancellor Lars Klingbeil expressed support, signaling a harder line, a notable shift given Germany’s traditionally cautious stance due to its export-dependent economy.


The Trade Bazooka Explained

The ACI provides the EU with a structured framework to respond to coercion, enabling tariffs, investment restrictions, procurement bans, and other measures without requiring unanimous agreement among member states. A qualified majority is sufficient—15 of 27 countries representing at least 65% of the EU population. The instrument also allows targeted measures affecting digital services, cloud providers, and data flows, potentially fragmenting the European market for U.S. tech companies.


Tech Sector at Risk

American tech giants could face restrictions on access to public procurement contracts and limitations on digital operations across the EU. Firms with European subsidiaries, such as Google and Meta, could find themselves legally barred from selling software in key markets like Paris or Berlin if the ACI is triggered.


Germany-France Coordination

Klingbeil emphasized that Europe must show it cannot be blackmailed, while extending a willingness to negotiate. French President Emmanuel Macron has advocated rapid activation, though Italy and other EU nations remain cautious. Chancellor Friedrich Merz, traditionally more conciliatory toward Washington, is closely watched as the coalition balances unity with economic pragmatism.


Stakes and Strategy

Deploying the ACI is both a political and strategic test. Analysts warn that failure to act decisively could embolden U.S. economic coercion in the future, while hasty action could trigger damaging countermeasures. For now, Europe appears readying the bazooka but keeping it on the shelf, signaling both resolve and restraint. The coming weeks will be critical in defining EU-U.S. trade relations and the bloc’s ability to protect its strategic autonomy in the tech and broader economic sectors.