French President Emmanuel Macron warned recently that if an elected Trump administration were to pursue its threat of imposing trade tariffs in connection with Greenland it could result in European Union use of what it calls its trade bazooka in response.
Macron made these statements amid new threats from Donald Trump to employ tariffs and economic power in pursuit of United States strategic goals suggesting a revival of previous statements about the relevance of Greenland to United States security.
Even though Greenland is a self governing territory that is part of the Kingdom of Denmark and is not a part of the EU Customs union.
The question is effectively a test of Europe’s determination to defend itself against what it considers economic coercion with a very close partner.
Addressing the situation together with fellow Europeans Macron stated that “the EU has legal instruments that can be used in order to respond to threats of the kind and that they will not hesitate to do so if the EU interests or sovereignty are threatened.”
He referred to the bloc Anti Coercion Instrument is a mechanism designed to prevent countries from applying economic pressure through tariffs, quotas or other restrictions.
The measure would allow the EU to retaliate with counter tariffs limits on trade in services restrictions on investment or access to public procurement.
The warning underlines a broader shift in Europe trade posture. For decades the EU has preferred negotiation and World Trade Organization processes.
Trump had earlier claimed that Greenland is strategically crucial because of its Arctic location and for its mineral including rare earths potentials.
In his first term, he had openly spoken about the idea of the United States acquiring the territory a suggestion outright rejected by Denmark and Greenland’s government.
The more recent remarks have stopped short of acquisition but have raised the prospect of using trade leverage to secure American interests in the region.
For Europe, this is a transnational concern for both trading and security issues and alliance politics. Denmark is a NATO member and a prime partner for the EU.
Officials from the EU have emphasized that the Anti Coercion Tool is more of a deterrent than an option of last resort.
However, it is clear that Macron is ready to scale up if that is what is required because one of the most fervent backers of EU strategic autonomy is the French President himself.
The threat of tit for tat tariffs also has economical repercussions for Australia. Whether the standoff will materialize or not is yet unclear.
Australia has in the past found itself in the midst of US and EU trade disputes regarding issues such as steel and aluminum imports.
Trump has not detailed particular actions regarding tariffs on Greenland but if he does they would encounter obstacles in Washington.
Nevertheless, the warning issued by Macron symbolize a Europe readying itself for a new era in international trade where threats concerning the economy would be countered with swift reaction.
