A trade ‘bazooka’ against Trump’s Greenland tariffs is in the cards for the EU
A projection of a Euro currency sign is seen on the facade of the European Central Bank (ECB) headquarters in Frankfurt am Main, West Germany, on December 30, 2025.
Kirill Kudryavtsev | Afp | Getty Images
Greenlandic Prime Minister Jens-Frederik Nielsen has stood firm on the island’s self-government and rejected any suggestion that trade pressure could affect the island’s political future.
“The latest statements by the United States, including tariff threats, do not change this line. We will not be pressured,” Nielsen said, according to Google’s translation.
Meanwhile, Europe is reportedly considering bringing out its trade “bazooka” and imposing tariffs worth 93 billion euros ($108 billion) on the United States, after President Donald Trump threatened to impose tariffs on eight European countries if an agreement is not reached on the sale of Greenland.
At an emergency meeting held in Brussels on Sunday, France called on the European Union to use the “Coercive Instrument”. Finance Times reported.
What is the instrument designed to deter? EU It describes it as “economic pressure” that could affect trade and investment in the bloc. Retaliation can extend beyond tariffs to fiscal restrictions, intellectual property-related measures, and limits on public procurement.
The diversity of effects has earned the instrument a reputation as Europe’s commercial “bazooka”, and not all EU members are keen to use it. Germany tends to be more hesitant about using this method, in part because of its heavy reliance on exports, Carsten Nickel, Deputy Director of Research at Teneo, told CNBC.
But no matter where you are on the continent, there is no escaping Trump’s tariffs. Among the most exposed sectors is the automotive industry, including Germany. bmw and on the Milan list Stellantis as a member; luxury names like France LVMH And Kering; and pharmaceutical giants including Denmark’s Novo Nordisk and Switzerland Roche.
However, no sector seems to be targeted by Trump more than French wine and champagne, which Trump threatened with a 200 percent tariff on Tuesday after it was reported that French President Emmanuel Macron did not want to participate in the “Peace Board” in Gaza.
The markets were shaken by this news. Depends on futures transactions Dow Jones Industrial Average It marked a drop of over 600 points at Tuesday’s open. European stocks fell broadly on Monday, while safe-haven assets gold And silver reached new highs just days after breaking previous records.
And that’s just the reaction to Trump’s first round of taxes. If the EU retaliates through targeted tariffs or a commercial bazooka, the economic fallout is likely to increase.
— CNBC’s Holly Ellyatt contributed to this report.
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Japan’s early elections: A careless risk or a calculated gamble?
Less than six months after taking office, Japan’s new prime minister, Sanae Takaichi, called for early elections, dissolving the Lower House on January 23 and sending voters to the polls on February 8. Analysts say the decision is largely aimed at strengthening the ruling Liberal Democratic Party and its coalition’s dominance in parliament by capitalizing on Takichi’s high approval ratings.
Sam Jochim, an economist at Swiss private bank EFG, said a stronger majority would allow Takaichi to give tighter political authority to foreign leaders, including U.S. President Donald Trump. He noted that Takaichi could potentially hold a meeting with the US president in early March.
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