Stephanie Lecocq / EPA
French President Emmanuel Macron
The European Union is preparing to block the approval of the trade agreement with the USA, due to Trump’s decision to impose tariffs on countries that supported Greenland. Macron will ask the EU to use the Anti-Coercion Instrument, the European economic bloc’s most powerful retaliatory trade tool.
A comprehensive trade deal reached in July, which sets a 15% tariff on most products and averts a transatlantic trade war, is on track to be finalized. canceled by the EUfollowing the announcement this Saturday that the United States will impose a policy that opposes the annexation of Greenland.
In a post on social media, Trump announced that the DenmarkNorway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland will face the tariff, which will be increased to 25% from June 1if by that date an agreement is not signed for the “complete and total purchase of Greenland”.
Manfred Weberpresident of the European People’s Party, the largest political group in the European Parliament, said this Saturday that the agreement with the USA “is no longer possible”.
“The EPP is in favor of the EU-US trade agreement, but taking into account Donald Trump’s threats regarding Greenland, approval is not possible at this stage”, Weber on social media. He also added that the EU’s agreement to reduce tariffs on “American products must be suspended“.
The EU-US trade agreement, which Ursula von der LeyenPresident of the European Commission, , has already been partially implemented, but still requires the approval of Parliament.
If EPP deputies join left-wing political groupsthey are likely to have enough votes to delay or block approval.
The trade agreement established a American rate of 15% for most EU products in exchange for the EU’s commitment to eliminate customs duties on American industrial products and some agricultural products. Von der Leyen, who oversees EU trade negotiations, concluded the agreement in hopes of avoid an all-out trade war with Trump.
One faction of MEPs has long opposed the agreementarguing that it was too unbalanced in favor of the US. That anger worsened when the US extended a 50% tariff on steel and aluminum to hundreds of additional EU products following the July deal.
This announcement was immediately rejected by European leaders, who are determining the next steps. In a statement, Von der Leyen declared that “tariffs would harm transatlantic relations and risk a dangerous downward spiral”, while the French president, Emmanuel Macronconsidered Trump’s threats “unacceptable“.
IAC, the EU’s “commercial atomic bomb”
In an interview this week, Bernd Langechair of the European Parliament’s Trade Committee, which helps oversee the discussion on ratifying the trade deal, stressed that “it is clear that the national sovereignty From any country must be respected by all partners of the trade agreement.”
After Trump’s announcement, Lange on social media that work on implementing the trade agreement with the US should be suspended until the Trump’s threats cease.
Bernd Lange also called on the EU to use its Anti-Coercion Instrument (IAC), a most powerful retaliatory trade tool of the EU — a kind of “commercial atomic bomb” from the European Union.
Meanwhile, Emmanuel Macron, who is today “in contact all day with his European counterparts”, will ask for “IAC activation” if Trump’s threats of customs surcharges are carried out, a source close to the French president said.
The IAC, which was never used, was designed primarily as a deterrent and, if necessary, to respond to deliberate coercive actions of third countries that use commercial measures such as means of pressuring political choices of the EU or its members.
These measures could include tariffs, new taxes on companies technological or targeted restrictions on investments in the EU. They could also involve limiting access to certain parts of the market of the EU or restricting the participation of companies in public tenders in Europe.
