European capitals could hit the US with taxes worth 93 billion euros or could restrict access of American companies to the bloc’s market, in response to threats from US President Donald Trump against NATO allies opposing his campaign to take over Greenland, reports the Financial Times (FT).
Retaliatory measures are being drafted to give European leaders an edge in crucial meetings with Trump at this week’s World Economic Forum in Davos, according to the FT, which cites officials involved in preparations for the meetings in Switzerland.
They are trying to find a compromise that would avoid a deep break in the Western military alliance, which would pose an existential threat to Europe’s security, news.ro reports.
The list of customs duties was drawn up last year, but was suspended until February 6 to avoid a full-scale trade war. Its reactivation was discussed on Sunday by the 27 EU ambassadors, along with the so-called anti-coercion instrument (ACI), which can limit the access of American companies to the internal market, while the bloc was struggling to find a response to the US president’s threat of punitive taxes.
Trump, who asked Denmark for permission to take control of Greenland, promised on Saturday night that he would impose 10% customs duties on goods from the UK, Norway, and six EU countries that sent troops to the Arctic island for a military exercise this week.
“There are clear retaliation tools at hand if this situation continues… [Trump] uses typical mafia methods,” a European diplomat informed about the discussions said.
“At the same time, we want to make a public call for calm and give him a chance to back down.”
France has asked the bloc to retaliate with ACI, which has never been used since its adoption in 2023. The instrument includes investment restrictions and can limit exports of services, such as those provided by major American tech companies in the EU.
Paris and Berlin are coordinating a common response, with finance ministers from the two countries set to meet in Berlin on Monday before heading to Brussels for a meeting with their European counterparts, a French ministry representative said.
While many other EU member states have expressed support for exploring how ACI could be used against the US, most G7 partners have said they disagree with using the instrument against the United States.
“The issue will have to be addressed with all G7 partners under the French presidency,” the person added.
“We need to calm spirits,” a second EU diplomat said.
In a retaliatory move, the largest parties in the European Parliament said this weekend that they will postpone the planned vote on measures that would have reduced EU taxes on American products, as part of a trade deal concluded last year.
Trump, who will attend the Swiss forum on Wednesday and Thursday, will have private discussions with European leaders, including European Commission President Ursula von der Leyen, and will participate in a broader discussion among Western countries supporting Ukraine.
“We want to cooperate and we are not the ones seeking conflict,” said Mette Frederiksen, the Danish Prime Minister.
National security advisers from Western countries will meet Monday afternoon, January 19, in Davos. The discussions were initially set to focus on Ukraine and ongoing peace negotiations to end Russia’s invasion of the country, but were revised to make time to discuss the Greenland crisis, two officials informed about the preparations said.
The Swiss foreign ministry, which is hosting the meeting, said it would not comment on participants or topics.
Trump’s threats “certainly justify ACI, as it would be a typical constraint,” a third European official said.
“But we need to use the time until February 1 to see if Trump is interested in an exit,” they said, adding that much will depend on the outcome of the discussions in Davos.
European officials said they hope their threats of retaliation will increase bipartisan pressure in the US against Trump’s actions and persuade him to abandon his promise on taxes.
“It’s already a situation that no longer allows compromises, because we can’t give up Greenland,” a fourth European official said.
“Reasonable Americans also know that he just opened Pandora’s box.” But on Sunday, US Treasury Secretary Scott Bessent said Europe is too weak to guarantee Greenland’s security and refused to give up the US request to take control of the strategically important island.
EU leaders are preparing to meet on Thursday in an emergency session to discuss the crisis, according to an official informed about the plans.
European Council President António Costa, who convenes such summits, said on Sunday night: “Given the importance of recent developments and to continue coordination, I have decided to convene an extraordinary meeting of the European Council in the coming days. The EU was prepared to defend itself against any form of coercion.”
