The European Union is weighing whether to trigger its “Anti‑Coercion Instrument,” sometimes referred to as a “nuclear option,” as U.S. President Donald Trump readies a 30% tariff on EU goods starting August 1 if no trade deal is reached.
EU diplomats told Reuters this week that several member states, notably France and Germany, are considering invoking anti‑coercion measures aimed at the United States should negotiations fail.
These steps could bar U.S. suppliers from taking part in public tenders in the EU, limit foreign firms’ ability to win government contracts, and impose new export and import controls on goods and services. They might also curb U.S. direct investment in certain sectors.
Taken together, these developments indicate that the time to deploy what some officials dub the EU’s “trade bazooka” could be fast approaching, as the standoff with Washington hits a critical point.
The White House has made clear that, unless a deal is struck by August 1, it will slap an extra 30% duty on a wide range of EU products entering the United States. That deadline, the administration insists, is firm, though talks could carry on beyond it.
U.S. EU trade tensions rise over imbalance
Relations between Brussels and Washington are particularly strained after Trump repeatedly accused the EU of keeping unfair trade advantages. He points to Europe’s steady surplus in goods trade with the U.S.
According to data from the European Council, total commerce between the EU and the U.S. reached €1.68 trillion ($1.97 trillion) in 2024. While Europe ran a surplus on goods, it recorded a deficit in services, leaving an overall surplus of about €50 billion last year.
Faced with the threat of a hefty U.S. tariff, Brussels has been weighing its options. Those include classic counter‑tariffs on American imports and the relatively new Anti‑Coercion Instrument, set up in 2023 but never used.
The ACI is meant first and foremost as a deterrent against any third‑country moves seen as economic bullying that aim to force changes in EU policy.
As the European Commission puts it, its main goal is “deterrence,” but if coercion does occur, the EU can respond “through dialogue and engagement, but also, as necessary, through response measures.”
Those counter‑actions are not limited to matching tariffs. The tool allows Brussels to block imports or exports of specific goods, curb certain services, and even restrict intellectual property rights or halt new foreign investments in the region.
Under the ACI, the EU could deny access to its market in targeted ways, such as freezing U.S. firms out of public procurement, or banning sales of particular foodstuffs and chemicals. It could also reach into the services sector, where America has a surplus, by targeting digital giants like Amazon, Microsoft, Netflix or Uber.
The Commission says any measures must match the harm they’re meant to address, stay narrowly targeted, and only remain in effect while the coercion is ongoing.
Before action can be taken, Brussels must investigate the claim of coercion and then secure backing from at least 15 of its 27 member states. Even after approval, the Commission would open talks with the offending country in hopes of finding a solution without measures taking effect.
Meanwhile, EU negotiators are racing to salvage a deal with Washington. Their goal is a 10% baseline tariff pact that includes carve‑outs and quotas to protect vital sectors such as autos, agriculture, machinery and aerospace.
ACI reserved as final option in case of trade war
Analysts Mujtaba Rahman, Emre Peker and Clayton Allen of Eurasia Group warned in a recent note that while the EU might accept a 10% duty, so long as key industries are shielded, any U.S. rate above 15% would almost certainly trigger countermeasures.
“Trump’s threat to triple the rate is seen as a negotiating tactic and not the landing zone by the EU,” they wrote. To press its case, Brussels could threaten duties covering up to €116 billion of U.S. exports and bring the full weight of the ACI to bear on American service providers.
The analysts characterize the ACI as the bloc’s ultimate “trade bazooka,” to be reserved strictly for cases where other tactics have not succeeded.
While governments in France, Spain and elsewhere are urging a hard line, the European Commission is expected first to respond with higher tariffs on U.S. goods.
But if negotiations continue to break down and a wider trade war unfolds, Brussels could step up with export controls, tighter public procurement rules and sanctions on U.S. services, reserving the full force of the ACI as a last resort.
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