I’m not going to comment on the US President’s (frankly) unhinged actions, which have become so odious that apparently members of his own party are in Congress They wonder if they should intervene to stop him.
Keir Starmer tried to be diplomatic and has indicated that Britain will not retaliate against US tariffswhich is pretty much the only position he can take, as any retaliation would certainly hurt the British economy far more than the American one. Britain on its own is simply too small to hurt the American economy.
But in my opinion the EU can and should take revenge. We learned in 2025 that the only way to stop Trump from bullying other countries is to stand firm and push back. Reconciliation has not worked in almost all cases, while the firm approach of China and Canada has worked much better.
So, as EU leaders debate what actions to take, let me summarize the possible retaliatory measures available to them. I’ve sorted them below from weak to strong (at least what I consider weak to strong).
Of course, these actions will cause an escalation from Trump in the short term, which is why some EU leaders, such as Germany’s Friedrich Merz, are currently trying to soften the EU’s response. But 2025 has also shown that if countries stand firm, the cycle of escalation ends within a few weeks and Trump backs down (or should I say “chickens out”?) once he realizes he cannot bully others into submission.
The EU’s possible countermeasures to US tariffs:
Stop ongoing negotiations over the details of last year’s US-EU trade deal and impose tariffs on 93 billion euros of US goods exported to the EU. As far as I’m concerned, this will almost certainly happen.
Add additional tariffs targeting specific U.S. goods. The problem with such tariffs is that they would increase inflation in the EU and significantly increase the pain for European economies in the short term.
Use the Digital Services Act and other existing EU regulations to restrict the activities of US tech companies in the EU or impose higher fines on social media platforms for violating the law. This could be used to attack Trump’s top donors, but it also opens a new battlefield and shifts the trade war from goods to services.
The EU’s ‘Buy European Act’ (currently making its way through the legislative process) could be used to redirect government procurement (particularly in services and technology) from US suppliers to European and Asian suppliers.
Activate the instrument against coercionallowing the EU to impose tariffs on service companies (where the US has a trade surplus with the EU) and on target companies linked to the US government (my analysis indicates that Alphabet, Microsoft and SpaceX would all qualify as government contractors under the instrument). The anti-coercion instrument is precisely designed for situations like the current one, and its activation would send a clear signal that the EU is willing to stand firm.
Introduce export taxes on EU exports to the US, which will be difficult to replace. This includes ASML’s machinery, but also other specialized machines and equipment, but also the American icebreakers recently ordered from Finland. The advantage of such an export tax is that it acts as an increase in US tariffs, raising inflation and costs for US companies, while maintaining revenues in the EU and allowing the EU to reuse these revenues to support European exporters suffering from US tariffs.
Reduce European capital flows to the US, for example by encouraging or even encouraging European banks and pension funds to reduce their holdings of US government bonds. The EU is the US’s largest lender and the US has a large external deficit. Reduced foreign demand could raise Treasury yields, but the Fed could neutralize the impact of these measures by intervening and relaunching quantitative easing to get the yield curve under control. This is why I think such a measure is essentially a non-starter short of an escalation into open hostilities.
Speaking of open hostilities, José Ignacio Torreblanca of the European Foreign Affairs Council has proposed a list of possible measures the EU could take if the US government escalates tensions over Greenland to the level of a military invasion (warning: this is getting scary now):
The EU could tell Washington that the annexation of Greenland would result in the end of the US military presence in Europe. While this presence is vital for European security, it is also critical for the US military to exert force globally. Ambassadors from EU countries could be recalled, and US ambassadors threatened with an invitation to leave if the annexation is not reversed.
The EU could take action Article 42.7, the clause on mutual assistance in case of armed aggression, which requires all Member States to assist any Member in difficulty.
EU members of NATO could call a crisis meeting of NATO and demand a reversal of the annexation. If the US refuses, the EU’s NATO members should expel US military attaches and invite other NATO members to follow suit. If the annexation continues, U.S. civilian and military personnel in Europe could be confined to their bases. Negotiations over the future of the US military presence in Europe must begin with the goal of Europeans gaining full control of NATO and using it to build meaningful European defense.
U.S. companies operating in annexed Greenland, including those in the energy, transportation, financial and digital services sectors, could be fined half of their turnover in Europe as long as the annexation continues. In addition, all negotiations on defense and technology contracts with the US could be suspended.
Sanctions similar to those imposed on Russia could be imposed. This could include sanctions against individuals in the U.S. government. Travel bans and confiscation of their assets (for example, Trump’s golf courses) could be issued.
#Europe