【By Observer Group, Qi Qian】

Over the past year, the EU has repeatedly taken out its "nuclear option" for trade — the "anti-coercion" mechanism — to bolster its stance, vowing to counter the Trump administration's tariff measures. But so far, no substantive actions have been taken.

After US President Trump threatened to impose a 10% "global tariff" and raise it to 15%, France once again made tough statements.

According to a report by the Financial Times, on February 21 local time, Nicolas Forissier, the French representative at ministerial level for foreign trade, told the newspaper that Brussels has the tools to respond to the latest round of US tariffs. He called on EU member states to take a "unified stance" against the US's new 10% tariff threat.

Forissier said that France is negotiating with EU member states and the European Commission regarding President Trump's decision.

"If necessary, the EU has appropriate tools," Forissier said, adding that it is too early to speculate on the EU's response, but options include the "anti-coercion tool", which could affect American technology companies.

Forissier further stated that Trump's threats have strengthened EU unity, and the EU must be ready to retaliate. He said, "We can't be naive anymore. We must use our tools, not just talk. We don't want to be dependent, we don't want to be hostages."

The Anti-Coercion Instrument (ACI) came into effect at the end of 2023, allowing the EU to restrict trade and services, cut certain intellectual property rights, limit foreign direct investment and access to public procurement. Many see it as a "nuclear option," whose intended purpose was to serve as a deterrent, but it has never been used. After the Trump administration imposed higher taxes, EU countries repeatedly hinted at using this tool, but nothing has come of it so far.

Nicolas Forissier, French Representative at Ministerial Level for Foreign Trade, Social Media

On local time February 20, the US Supreme Court ruled that Trump's core policy tool was illegal.

Trump was extremely angry at this ruling and immediately announced an additional 10% import tariff on global goods for 150 days on top of existing tariffs. He became even more angry and the next day (February 21), posted on social media, threatening to raise the 10% "global tariff" to 15%.

The Financial Times reported that in the face of the new tariff threats, the EU is "on high alert." The European Parliament will hold a meeting on local time February 23 to discuss further delaying the approval of the trade agreement reached last year with Washington.

German Chancellor Merkel said he hopes and expects that Germany's tariff burden will be reduced after the US Supreme Court ruling. He said he will raise his concerns during his visit to Washington in early March, while coordinating closely with the EU. "I want to make it clear to the US government that tariffs are harmful to everyone, not beneficial to some and harmful to others," he said.

Merkel described the ruling as "reassuring," adding, "the separation of powers in the US still seems to be working. That's good news."

Fabio Panetta, governor of the Bank of Italy and member of the European Central Bank's governing council, mentioned that there is evidence showing that US tariffs have caused price increases and harmed US companies that rely on imports.

He said, "Initially, the impact was absorbed by the profit margins of US companies, then partially passed on to consumers, and now consumers bear about half of the tariff impact. Overall, the tariffs are estimated to have increased inflation by slightly more than half a percentage point, which is still above the Federal Reserve's 2% target."

The Indian Ministry of Trade said it is "studying all these developments and their impacts." India and the US announced a temporary trade framework in February, after months of stalled negotiations. According to the agreement, India's tariff burden on the US would be reduced from 50% to 18%, provided New Delhi agrees to open its market to most US industrial products and some food items.

Trump said on February 20 that "nothing will change with India; they will pay the tariffs, and we won't pay them."

A South Korean presidential spokesperson said the ruling "undoubtedly increased the uncertainty in the international trade environment."

The Indonesian Ministry of Economic Affairs said it is "monitoring the latest developments." The country has finalized a trade agreement with the US this week. "(The trade agreement) will continue depending on the decision of both sides. This means Indonesia still needs to approve the agreement, and it will not take effect immediately."

On February 20, the US Supreme Court overturned Trump's so-called "reciprocal tariffs" with a single ruling. This made Japan look particularly ridiculous three days earlier (on the 17th) when it had just fulfilled its first investment commitments under the bilateral trade agreement.

Even so, Japan seems determined to continue abiding by the trade agreement.

A senior Japanese official told Nikkei Asia that the US Supreme Court ruling would not affect Japan's first round of investment projects. The official pointed out that these projects are funded by Japan's previous $55 billion investment plan to the US, as a condition for the US to lower tariffs. These investments are crucial not only for Japan's economic growth but also for national economic security.

This article is exclusive to Observer Group. Unauthorized reproduction is prohibited.

Original: toutiao.com/article/7609558026471424522/

Statement: The views expressed in this article are those of the author and do not necessarily reflect the position of the publisher.