"Europe is weighing retaliation if President Donald Trump imposes more tariffs - and it threatens the US's big global advantage. French President Emmanuel Macron pushed to activate what's commonly referred to asa trade "bazooka" in response to Trump's recent threat to impose an additional 10% tariff on European countries unless they agree to a deal ceding control of Greenland."
""The anti-coercion mechanism is a powerful instrument, and we should not hesitate to deploy it in today's tough environment," Macron said at the World Economic Forum at Davos on Tuesday. Macron was referring to a tool passed by the EU in 2023 that would allow it to impose tariffs on imports and restrict services from the US. The hit to services such as pharma, tech, and finance would be the new blow to the US economy, as tariffs tend to focus on goods."
Europe considers retaliation if the US imposes further tariffs tied to a Greenland deal. Macron urged activation of the EU's 2023 anti-coercion mechanism that permits tariffs on imports and restrictions on services. The mechanism could target US services sectors such as pharmaceuticals, technology, and finance. Tariffs traditionally focus on goods, while the US has a long-standing surplus in services, exporting $1.1 trillion in 2024 and $489 billion to Europe. Economists warn that threats of coercion and territorial acquisition could jeopardize US international standing and involve uncharted trade responses. The US's services strength underpins global efficiency and consumer benefits, according to Federal Reserve and BEA data.
Read at Business Insider
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