European Union diplomats spent January 18 in tense discussion over whether to reactivate a contingency list of retaliatory tariffs that would target €93 billion of US exports. The list, drawn up last year but shelved to avoid a full-scale transatlantic trade war, has a pause that lapses in early February; officials are now debating whether to lift that stay and whether to deploy an EU anti‑coercion tool to counter what Brussels views as political pressure from Washington.
The immediate trigger has been an extraordinary move by President Donald Trump: he announced tariffs on goods from eight European countries to force concessions over a bid to acquire Greenland. Several EU capitals responded by dispatching forces to the Danish autonomous territory for a joint military exercise, and European diplomats described the US pressure as coercive and destabilising. Some EU officials characterised the president's tactics in stark terms, while simultaneously urging a public appeal for calm and a diplomatic off‑ramp.
Behind the theatre, EU members are balancing multiple calculations. Reactivating the tariff list would give European leaders negotiating leverage ahead of a planned encounter with Trump at the World Economic Forum in Davos; some diplomats said they wanted to wait until February 1 to see whether Washington actually implements new tariffs before retaliating. Brussels hopes that the mere threat of countermeasures will create bipartisan pressure within the United States against unilateral economic coercion.
Yet unity in the EU is not guaranteed. Member states vary in economic exposure to US markets and in their appetite for escalation. The measures under consideration are designed to be proportional and targeted, but any tit‑for‑tat development could ripple through global supply chains and increase market volatility at a moment when inflation and geopolitical tensions are already weighing on growth.
The Greenland episode underscores a wider shift: trade instruments are being used as tools of geopolitical coercion, and traditional postwar norms of allied diplomacy are fraying. The Arctic has become a strategic theatre where military deployments, resource ambitions and alliance politics intersect, and the prospect of trade retaliation illustrates how economic policy is being repurposed as hard power.
For international businesses and governments, the coming weeks will test whether Brussels can translate threats into credible deterrence without triggering a damaging spiral. The EU's choices will also signal to other partners — China, Russia and smaller states in the Arctic rim — whether Europe is prepared to defend strategic interests with both defence measures and trade policy.