Europe weighs using trade 'bazooka' against the U.S. as Greenland crisis deepens

European states are reportedly considering retaliatory tariffs and broader punitive economical counter-measures against the U.S. aft President Donald Trump threatened caller export levies, deepening a rift implicit Greenland.

Trump announced Saturday that eight European countries would look expanding tariffs, starting astatine 10% connected Feb. 1 and rising to 25% connected June 1, if a woody is not reached allowing Washington to get Greenland, the mineral-rich land which is simply a semi-autonomous territory of Denmark.

The projected tariffs would people Denmark, Norway, Sweden, France, Germany, the U.K, the Netherlands and Finland. The duties would travel connected apical of existing export tariffs to the U.S., presently lasting astatine 10% for the U.K. and 15% for the EU.

Regional diplomats held an exigency gathering successful Brussels connected Sunday day to sermon their effect to Trump's menace to escalate tariffs, with France reportedly pushing for the EU to usage its strongest economical counter-threat to the U.S., known arsenic the "Anti-Coercion Instrument" (ACI).

The much-vaunted instrumentality is seen arsenic a atomic enactment erstwhile it comes to economical counter-measures arsenic it could spot the EU restrict U.S. suppliers' entree to the EU market, excluding them from information successful nationalist tenders successful the bloc, arsenic good arsenic putting export and import restrictions connected goods and services, and limits connected overseas nonstop concern successful the region.

Despite being seen arsenic a "big bazooka" against Trump's tariffs playbook, it has not been utilized before, and determination leaders person already said they privation to prosecute dialog with the U.S. successful the coming days to resoluteness the rift implicit Greenland.

The Financial Times reported that the EU was considering imposing 93 cardinal euros ($108 billion) worthy of tariffs, arsenic good arsenic considering the usage of the ACI. Meanwhile, Reuters reported that the European Parliament volition apt now suspend its work on the EU-U.S. commercialized deal struck past July.

The assembly had been owed to ballot connected removing galore EU import duties connected U.S. goods connected Jan. 26-27, but that support could present beryllium delayed, Reuters reported.

While France is much gung-ho astir the ACI, Germany is among the countries that person tended to shy distant from utilizing it before.

"The cardinal question to ticker is whether the EU volition effort to support the confrontation confined to specified a much "classic" commercialized war, oregon whether calls for a harsher enactment prevail," Carsten Nickel, lawman manager of Research astatine Teneo, said successful emailed comments.

"Representing the second camp, France has called connected its partners to formally invoke the EU's so-called anti-coercion instrument ... [but] different EU subordinate states, including Germany, volition apt stay careful."

The reasons for this disagreement are multifaceted, Nickel noted, including factors specified arsenic France traditionally advocating for a much autarkic European relation successful continental security, and it being little export-dependent than different nations similar Germany.

European leaders were speedy to respond to Trump's astonishment tariff threat, with U.K. Prime Minister Keir Starmer commenting Saturday that "applying tariffs connected allies for pursuing the corporate information of NATO allies is wholly wrong," portion French President Emmanuel Macron described them arsenic "unacceptable."

Nonetheless, leaders are expected to usage the World Economic Forum taking spot successful Davos, Switzerland, this week, arsenic an accidental to effort to speech to Trump, who is addressing the forum connected Wednesday.

Economists pass that, overmuch similar past twelvemonth erstwhile months of wrangling took spot earlier a commercialized woody was signed betwixt the U.S. and EU, this outpouring volition apt beryllium dominated by likewise thorny discussions implicit Greenland.

"My basal lawsuit is that the Feb. 1 [tariffs] deadline is going to beryllium postponed arsenic diplomatic measures are implemented," Mohit Kumar, main European economist astatine Jefferies, told CNBC Monday.