The European Union (EU) is contemplating the activation of its anti-coercion instrument to counter President Donald Trump's recent threats of imposing tariffs on Denmark unless it agrees to sell Greenland. This instrument, adopted in 2023, is designed to mitigate economic coercion from major economies, including the United States and China, which have historically used tariffs to further national interests.

Trump's proposed tariffs, which could range from 10% to 25%, are scheduled to take effect on February 1, should Denmark not comply by June. In response, the EU is reportedly preparing to impose tariffs amounting to €93 billion (approximately $107.71 billion) against the U.S. This was discussed during a meeting of EU ambassadors, as the bloc aims to leverage these measures in upcoming discussions with Trump at the World Economic Forum in Davos.

The eight nations potentially impacted by U.S. tariffs—Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the United Kingdom—have issued a joint statement expressing concern that such tariffs could harm transatlantic relations and lead to a detrimental downward spiral. UK Prime Minister Sir Keir Starmer emphasized to Trump that imposing tariffs on allies engaged in collective security within NATO is inappropriate, asserting that the future of Greenland should be determined by its people and the Kingdom of Denmark.

The EU's approach is characterized by a combination of incentives and deterrents, indicating a willingness to retaliate while also seeking to de-escalate tensions. Member states, particularly Germany and Italy, have expressed caution regarding the rapid deployment of the anti-coercion tool, fearing potential repercussions on transatlantic relations and the EU's security commitments through NATO. The EU has previously refrained from utilizing this instrument in response to China's export policies, opting instead for diplomatic dialogue.

As the situation evolves, European leaders have reiterated their commitment to supporting Denmark and Greenland's sovereignty, with the possibility of implementing previously considered retaliatory tariffs if negotiations fail. This scenario raises concerns about the potential for a new trade conflict between the EU and the U.S., particularly in light of the upcoming midterm elections in the United States, where political dynamics may influence responses to such economic measures.