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EU capitals are considering hitting the US with €93bn worth of tariffs or restricting American companies from the bloc’s market in response to Donald Trump’s threats to Nato allies opposed to his campaign to takeover Greenland. The move marks the most serious crisis in transatlantic relations for decades.
The retaliation measures are being drawn up to give European leaders leverage in pivotal meetings with the US president at the World Economic Forum in Davos this week, officials involved in the preparations said.
They are bidding to find a compromise that would avoid a deep rupture in the western military alliance, which would pose an existential threat to Europe’s security.
The tariff list was prepared last year but suspended until February 6 to avoid a full-blown trade war. Its reactivation was discussed on Sunday by the EU’s 27 ambassadors, along with the so-called anti-coercion instrument (ACI) that can limit the access of American companies to the internal market, as the bloc wrestled over how to respond to the US president’s threat with punitive tariffs.
Trump, who has demanded permission from Denmark to take control of Greenland, on Saturday evening vowed to impose 10 per cent tariffs by February 1 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 instruments at hand if this continues . . . [Trump’s] using pure mafioso methods,” said a European diplomat briefed on the discussion. “At the same time we want to publicly call for calm and give him an opportunity to climb down the ladder.”
“The messaging is . . . carrot and stick,” they added.
France has called for the bloc to hit back with the ACI, which has never been used since its adoption in 2023. The tool includes investment restrictions and can throttle exports of services such as those provided by US Big Tech companies in the EU.
Paris and Berlin are coordinating a joint response, with their respective finance ministers due to meet in Berlin on Monday before travelling to Brussels for a gathering with their European counterparts, a French ministry aide said. “The issue will also have to be broached with all G7 partners under France’s presidency,” the person added.
While many other EU member states have voiced support for exploring how the ACI could be deployed against the US, a majority called for dialogue with Trump before issuing direct threats of retaliation, diplomats briefed on the discussions told the FT.
“We need to get the temperature down,” said a second EU diplomat.
In a step towards retaliation, the biggest parties in the European parliament this weekend said they would delay a planned vote on measures that would have reduced EU tariffs on US goods as part of a trade agreement struck last year.
Trump, who will be at the Swiss forum on Wednesday and Thursday, is set to hold private talks with European leaders including European Commission President Ursula von der Leyen, in addition to participating in a wider discussion among western countries supporting Ukraine.
“We want to co-operate, and it is not we who are seeking conflict,” said Mette Frederiksen, Denmark’s prime minister.
National security advisers from western countries will meet in Davos on Monday afternoon. The talks were initially set to focus on Ukraine and ongoing peace talks to end Russia’s invasion of the country, but have been overhauled to give time to discuss the crisis over Greenland, two officials briefed on the preparations said.
The Swiss foreign ministry, which is hosting the gathering, said it “will not comment on participants or topics”.
Trump’s threats “certainly warrant the ACI as it would be textbook coercion”, said a third European official.
“But we need to use the time to February 1st to see if Trump is interested in an off-ramp,” they said, adding that much would depend on the outcome of the talks in Davos.
European officials said that they hoped their retaliation threats would increase bipartisan pressure in the US against Trump’s actions and result in him retreating from his tariff pledge.
“It is already a situation that no longer allows compromises, because we cannot hand over Greenland,” said a fourth European official. “The reasonable Americans also know that he has just opened Pandora’s Box.”
But on Sunday US Treasury secretary Scott Bessent said that Europe was too weak to guarantee Greenland’s security, and refused to back down on the US demand to take control of the strategically important island.
“The president believes enhanced security is not possible without Greenland being part of the US,” he told NBC News.
Additional reporting by Barbara Moens, Alice Hancock, Andy Bounds and Laura Dubois in Brussels, Sarah White in Paris, Laura Pitel in Berlin and Richard Milne in Oslo.
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