The European Union assembled a €93 billion ($108 billion) tariff package aimed at US imports on Sunday, marking the most serious transatlantic trade crisis in decades as Brussels responds to President Trump's demands to acquire Greenland.
The retaliation measures, discussed by EU ambassadors over the weekend, represent the bloc's leverage heading into pivotal meetings with Trump at the World Economic Forum in Davos this week. The tariff list was originally prepared last year but suspended until February 6 to avoid a trade war. EU officials confirmed its reactivation is now under active consideration.
Trump escalated tensions Saturday evening by threatening 10% tariffs on goods from the UK, Norway, and six EU countries that deployed troops to Greenland for military exercises. Those tariffs would take effect February 1 and escalate to 25% by June if Denmark refuses to negotiate the sale of Greenland, a demand the Danish government has categorically rejected.
"There are clear retaliation instruments at hand if this continues," a European diplomat briefed on the discussions told the Financial Times. "He's using pure mafioso methods."
The EU is considering two primary weapons. The first is the tariff package, which would hit $108 billion worth of American imports. The second is the anti-coercion instrument (ACI), a regulatory tool adopted in 2023 but never deployed. The ACI could restrict investment and throttle exports of services from US tech giants including Google, Amazon, and Microsoft in the European market.
France has led calls to deploy the ACI, with Paris and Berlin coordinating a joint response. French and German finance ministers were scheduled to meet in Berlin on Monday before traveling to Brussels for broader European consultations. "The issue will also have to be broached with all G7 partners under France's presidency," a French ministry aide said.
The European Parliament took its first concrete step toward retaliation over the weekend, delaying a planned vote that would have reduced EU tariffs on US goods under a trade agreement struck last year.
European Commission President Ursula von der Leyen is scheduled for private talks with Trump in Davos on Wednesday and Thursday. "We will stand firm in our commitment to uphold the sovereignty of Greenland and the Kingdom of Denmark," von der Leyen said Sunday. "We will always protect our strategic economic and security interests."
US Treasury Secretary Scott Bessent showed no signs of backing down, telling NBC News that "the president believes enhanced security is not possible without Greenland being part of the US." He characterized Europe as too weak to guarantee the strategically important island's security.
European Council President António Costa announced plans for an emergency EU summit later this week to coordinate the bloc's response. "We are ready to defend ourselves against any form of coercion," Costa said.
The crisis puts significant economic relationships at risk. The EU and US maintain the world's largest bilateral trade relationship, with goods and services trade exceeding $1.3 trillion annually. American companies generated approximately $340 billion in revenue from European operations in 2024, according to Commerce Department data.
Market reaction has been swift. European defense stocks rallied on expectations of increased military spending, while shares of US exporters with significant European exposure declined. The euro strengthened against the dollar as investors questioned the long-term stability of the greenback as the world's reserve currency.
"It is already a situation that no longer allows compromises, because we cannot hand over Greenland," a fourth European official told the Financial Times. "The reasonable Americans also know that he has just opened Pandora's Box."
The numbers don't lie, but executives sometimes do. In this case, the numbers suggest a trade war neither side can afford, though political calculations may override economic sense.
