EU Considers Activating Anti-Coercion Instrument Amid US 30% Tariff Threat

The European Union is preparing to consider activating its Anti-Coercion Instrument (ACI), a high-stakes trade tool designed to counter economic pressure from third countries. The potential move comes amid escalating tensions with the United States, where President Donald Trump has threatened to impose a 30% tariff on EU goods from August 1 if no trade agreement is reached. EU member states, including France and Germany, are reportedly weighing the use of the ACI as a response to perceived U.S. coercion, marking a significant escalation in the ongoing dispute over trade imbalances.

The ACI, introduced in 2023 but never utilized, grants the EU the authority to restrict access to its market through measures such as blocking U.S. firms from public tenders, limiting foreign investments in key sectors, and imposing export or import controls on specific goods and services. These actions could target U.S. companies in industries ranging from agriculture to technology, including digital platforms like Amazon and Microsoft. The tool’s primary aim is deterrence, but its activation would signal a shift from diplomatic negotiations to more confrontational tactics.

Trade tensions between the EU and U.S. have intensified due to Trump’s repeated accusations of an unfair trade surplus held by the EU. In 2024, bilateral trade reached €1.68 trillion, with the EU maintaining an overall surplus of approximately €50 billion despite a services deficit. The U.S. has positioned the proposed tariffs as a response to this imbalance, but EU officials argue that the measures lack justification and could destabilize global trade. The White House has emphasized that the August 1 deadline is firm, though it remains open to extending talks beyond that date.

Activation of the ACI requires a two-step process: first, the European Commission must investigate claims of coercion, and second, at least 15 of the 27 member states must approve any retaliatory measures. Even after approval, the Commission would attempt to resolve the issue diplomatically before implementing sanctions. This procedural threshold underscores the instrument’s role as a last resort, reserved for scenarios where negotiations collapse entirely.

Analysts suggest that the EU is unlikely to trigger the ACI unless U.S. tariffs exceed 15%. A 10% baseline agreement with carve-outs for critical sectors—such as automotive, agriculture, and aerospace—is seen as the most probable outcome. However, Trump’s 30% threat is viewed as a negotiating tactic rather than a final offer. If the U.S. fails to compromise, the EU could escalate with tariffs on up to €116 billion of U.S. exports and leverage the ACI to pressure American service providers.

While the ACI represents a formidable tool, its use carries risks of a broader trade war. Member states like France and Spain are advocating for a firm stance, while the European Commission is expected to initially respond with higher tariffs on U.S. goods. Export controls, procurement restrictions, and service sector sanctions could follow if talks fail. The ACI’s full force remains a final option, reserved for scenarios where all other diplomatic avenues have been exhausted.

The EU’s strategic calculus reflects a balancing act between protecting its economic interests and avoiding a protracted conflict. The ACI’s existence itself serves as a deterrent, signaling the bloc’s willingness to defend its autonomy. However, its activation would mark a pivotal moment in transatlantic relations, reshaping the landscape of global trade dynamics and setting a precedent for how economic coercion is addressed by major trading powers.