EU readies €100B no-deal plan to counter U.S. 30% tariffs under Trump trade threat

The European Union is preparing to deploy its Anti-Coercion Instrument (ACI) as a last-resort tool to counter potential U.S. trade pressures, with key member states signaling strong support for its activation if a transatlantic trade agreement remains elusive. EU diplomats confirmed that France and Germany, along with a majority of member states, are actively considering retaliatory measures against perceived economic coercion, including tariffs and restrictions on U.S. access to EU markets [1][2]. The ACI, described as a "trade bazooka," is designed to counter third-party countries imposing coercive trade practices, with the U.S. now emerging as a focal point of concern [3]. A €100 billion contingency plan has been drafted to match potential U.S. tariffs of up to 30%, with Berlin explicitly endorsing the use of the ACI in a no-deal scenario [4]. This shift reflects growing unease within the bloc over escalating trade tensions under the Trump administration, which has hinted at imposing fresh tariffs on European goods [5].

The ACI’s potential activation marks a significant escalation in the EU’s trade strategy. Previously positioned as a tool to counter China’s influence, the mechanism is now being reoriented toward transatlantic disputes. EU officials emphasized that the instrument would allow for restrictions on U.S. access to public procurement contracts and other market privileges, though its use remains contingent on securing broad consensus among member states [6]. While political divisions persist, the backing of Germany and France has bolstered confidence in the ACI’s viability. Analysts note that the EU’s readiness to act unilaterally underscores a strategic shift toward asserting economic sovereignty amid global trade uncertainties [7].

The implications of this stance could reshape U.S.-EU relations. If deployed, the ACI would directly challenge Trump’s trade policies, which have already strained transatlantic ties over steel, aluminum, and agricultural disputes. The bloc’s €100 billion no-deal plan, which includes retaliatory tariffs on key U.S. exports like soybeans and bourbon, further signals a willingness to absorb short-term economic costs to safeguard long-term trade interests [8]. However, the move risks deepening a trade war, particularly as the U.S. administration has yet to indicate flexibility in negotiations. EU diplomats stressed that the ACI remains a "last resort," with ongoing talks still possible if a deal is reached before November [9].

The EU’s firm posture also reflects broader geopolitical dynamics. With China as a secondary but persistent trade rival, the bloc is increasingly prioritizing tools to counter coercion from multiple adversaries. The ACI’s dual application—against both the U.S. and China—highlights its strategic importance as a deterrent. However, internal cohesion remains a challenge, as smaller member states may hesitate to provoke a trade war with the U.S. [10]. Despite this, the backing of major economic powers suggests the EU is prepared to leverage its collective market weight to assert its interests.

Sources:

[1] [Europe has a 'trade bazooka' against Trump's trade tariffs](https://www.cnbc.com/2025/07/22/europe-has-a-trade-bazooka-against-trumps-trade-tariffs.html)

[2] [The EU may activate its Anti-Coercion Instrument (ACI)](https://www.mitrade.com/insights/news/live-news/article-3-978421-20250723)

[3] [Why 'anti-coercion' tool is the EU's trade weapon of last resort](https://www.straitstimes.com/world/europe/why-anti-coercion-tool-is-the-eus-trade-weapon-of-last-resort)

[4] [EU Readies €100 Billion No-Deal Plan to Match US 30%](https://www.bloomberg.com/news/articles/2025-07-23/eu-readies-100-billion-no-deal-plan-to-match-us-30-tariff)

[5] [Europe Prepares for a U.S. Trade Fight](https://www.msn.com/en-us/money/markets/europe-prepares-for-a-u-s-trade-fight/ar-AA1IXBqc)

[6] [How Europe's 'trade bazooka' could be a last resort against...](https://www.cryptocraft.com/news/1352601-how-europes-trade-bazooka-could-be-a-last)

[7] [The Poker Game Between the US, China, and Europe](https://thediplomat.com/2025/07/the-poker-game-between-the-us-china-and-europe/)

[8] [EU readies €100 billion no-deal plan to match Trump's 30...](https://www.msn.com/en-in/money/topstories/eu-readies-100-billion-no-deal-plan-to-match-trump-s-30-tariff/ar-AA1J8yaQ)

[9] [The EU may activate its Anti-Coercion Instrument (ACI)](https://www.mitrade.com/insights/news/live-news/article-3-978421-20250723)

[10] [The Poker Game Between the US, China, and Europe](https://thediplomat.com/2025/07/the-poker-game-between-the-us-china-and-europe/)