【By Observer Net, Wang Yi】A military exercise held by several European countries in Greenland has angered US President Trump. On January 17 local time, he announced on social media that starting February 1, a 10% tariff would be imposed on goods imported from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland, which would increase to 25% on June 1, until the relevant parties reach an agreement on the US "comprehensive and thorough purchase of Greenland".
Face with Trump's tariff threats, European leaders are preparing to study solutions to respond. On January 18, the U.S. Wall Street Journal helped Europe outline options, including trade retaliation, using so-called "trade nuclear weapons" as counter-coercion tools, strengthening cooperation with other regions, and even reducing defense cooperation with the United States.
The report analyzes that although individual European countries find it difficult to effectively respond to Trump's 10% tariff threat, if they act as a whole, the EU can raise the cost for the US to impose tariffs, seeking concessions from the US on the Greenland issue.
Europe is re-evaluating its stance towards the US
The US Bloomberg News pointed out on the 19th that Trump has always liked to place himself at the center of the stage when visiting abroad. This week's trip to Davos was deliberately made dramatic before his departure. Before attending the World Economic Forum in Switzerland, Trump again shook the foundation of the EU and NATO alliance, threatening a series of new tariffs around his "Greenland ambition". These tariff threats not only affect Europe but also openly violate agreements previously reached with the EU and the UK.
For a long time, Trump has been dissatisfied with Europe, often portraying this group of America's closest allies as "free riders", enjoying America's generosity and military protection while "harassing" American tech giants.
Last year, when facing Trump's "reciprocal tariff" threat, European leaders mostly chose to deal with it in a restrained manner, hoping to maintain US investment in NATO, especially in Ukraine's defense.
On January 18 local time, Danish soldiers arrived in Greenland. IC Photo
But the recent weekend, Trump's new round of tariff threats against eight European countries reignited tensions, possibly forcing Europe to take the retaliatory measures it had avoided before. The Wall Street Journal analysis said that Trump now directly linking trade issues with security issues is prompting Europe to reassess its position.
Mujtaba Rahman, director general of Eurasia Group's European affairs, said that the EU generally believes it must respond this time, "the cost they have paid to obtain US support on NATO and Ukraine issues has become too high." However, he also pointed out that before the new tariffs take effect, the EU is unlikely to take major actions.
Several European diplomats revealed that they have not yet decided on which path to take, and there is still time for negotiations with the US and internal coordination before the EU officially responds. European leaders hope to meet with Trump, who is expected to attend the World Economic Forum in Davos this week. Afterward, European leaders will hold another meeting later this week to discuss the Greenland issue.
At present, European Parliament members have announced that they will freeze the approval process of the trade agreement reached last summer between Trump and the President of the European Commission, von der Leyen, and publicly called for trade retaliation measures against the US.
According to a report by the British Financial Times on the 19th, during an emergency meeting on the 18th, the EU discussed reviving a list of tariffs prepared last year, imposing tariffs on US products worth about 93 billion euros (75.3 billion yuan), and even considering using a trade tool that has never been used before, the "counter-coercion tool," to limit American companies, especially large technology companies, from entering the EU market.
Europe has some cards, but dare to play them?
According to the US media's summary, the EU is assessing or considering the following response options.
First, delay the implementation of zero tariffs on US products. The EU, with 450 million consumers, is the largest regional trade partner of the US. Last summer, the EU and the US reached an unequal trade arrangement, where the US imposed a 15% tariff on most EU goods, and the EU planned to cancel existing tariffs on various US products. This tariff reduction still needs approval from the European Parliament. Trump's latest tariff threat has prompted multiple major political groups within the European Parliament to call for the suspension of the approval process.
Second, impose new retaliatory tariffs on certain US products. Last year, the EU had prepared a list of US products worth over $100 billion, including chewing gum, motorcycles, and peanut butter, as a countermeasure against Trump's tariffs. However, this list was put on hold after both sides reached a trade agreement.
Now, some member states face a 10% new tariff, and it may rise to 25% in June. The EU may revive this list. Analysts point out that this could cause dissatisfaction from the US and lead to an escalation of tariffs. However, economic retaliation might be sufficient to prompt the EU to take action on the Greenland issue.
Third, use the counter-coercion tool. This tool, in principle, grants the EU broad powers, including implementing export controls, taxing services, restricting intellectual property, and limiting American companies' participation in bidding for European public contracts. The counter-coercion tool originates from an EU regulation that came into effect more than two years ago but has not been used in actual trade measures. Ironically, when this mechanism was passed, European public opinion generally believed that this trade defense measure was designed for countries like China rather than an ally like the US.
Ignacio García Bercero, former director of the Directorate-General for Trade of the European Commission, said that Trump's tariff threats "fully meet the conditions for triggering the counter-coercion mechanism." However, to use this tool against the US, the European Commission needs support from slightly more than half of the member states and representing at least 65% of the EU's total population. A European diplomat said that the actual support required for political acceptance might be higher.
Fourth, strengthen European defense and limit the use of US military bases. Some EU leaders are worried that if Trump controls Greenland, other European territories may become his next target, which will also impact the stability of NATO and the situation in Ukraine.
Europe can choose to increase its military presence in Greenland, accelerate the enhancement of defense spending, or reduce the procurement of military equipment from the US to respond. However, the reality is that many key weapon systems are produced only by the US, and Europe's own defense industry remains insufficient.
A more radical option is to restrict or even terminate the use of US military bases in Europe, such as the Ramstein Air Base in Germany. However, this move would significantly escalate tensions and may prompt Trump to withdraw troops stationed in Europe, which is not desired by either side at this time.
Fifth, strengthen cooperation with other regions of the world. Trump's tariff threats have rekindled the EU's desire to promote trade diversification to reduce dependence on the US. On the same day that Trump threatened to impose new tariffs over the Greenland issue, the EU signed a trade agreement with four South American countries.
The EU plans to announce a trade agreement with India as early as this month, and may also advance similar arrangements with Australia. In addition, Trump's latest threat may also prompt the EU to reconsider its "de-risking" strategy towards China.
Whether Trump's tariff threats will be implemented is also uncertain
According to Bloomberg, Trump's visit to Davos is expected to reveal details of his housing and living cost policies to consolidate his support base before the 2022 US midterm elections. However, his recent strong statements on the Greenland issue have broken the fragile trade truce formed last year between Washington and European countries after reaching agreements with the EU and the UK.
All eight countries subject to tariffs have issued statements opposing it. The UK Prime Minister Sunak, who has always maintained a cautious good relationship with the White House, also explicitly stated that Trump's tariff measures were "completely wrong." Sunak said in a statement, "We certainly will directly negotiate with the US government on this issue."
French President Macron said on January 17 on social media that Trump's tariff threats after his support for Greenland in France were "unacceptable," and "no threats or intimidation will affect us."
A senior French official said on January 18 that Macron would represent France to request the activation of the EU's counter-coercion tool. A French assistant from the Ministry of Economy and Finance told the Financial Times that France and Germany are coordinating a joint response plan, and their finance ministers will meet in Berlin on January 19, then go to Brussels to meet with other European counterparts. "This issue also needs to be communicated with all G7 partners during the period when France holds the presidency."
German government spokesperson Stefan Koenig responded, saying, "The German government has noted the remarks of the US president and is closely consulting with European partners. We will jointly decide on appropriate measures at the appropriate time."
Norwegian Prime Minister Stoltenberg posted on social media that threats should not exist between allies. He stated, "Norway's position is firm: Greenland is part of Denmark. Norway fully supports Denmark's sovereignty." There is a broad consensus within NATO on strengthening security in the Arctic region, including Greenland.
Swedish Prime Minister Kristersson also issued a written statement saying, "We will not be blackmailed. Only Denmark and Greenland can decide on issues involving Denmark and Greenland."
Denmark's Foreign Minister Rasmussen said that Trump's tariff policy was "unexpected," and Denmark is maintaining close dialogue with the EU.
Dutch Foreign Minister Van Veldhoven posted on social media that the Netherlands has noted Trump's statement on tariffs, and the Netherlands is maintaining close contact with the European Commission and partners to discuss response measures.
President of Finland Alexander Stubb also posted that problems between allies should be resolved through dialogue, not pressure. He wrote, "Tariffs will harm transatlantic relations and may lead to deterioration of relations."
On January 17, demonstrations were held in various places in Denmark and Greenland, with protesters holding slogans such as "Greenland is not for sale" and "Americans, please leave," rejecting the US's attempt to "control" or "buy" Greenland.
Greenland's autonomous government prime minister Nielsen participated in the protest demonstration. IC Photo
Outside of the opposition, whether Trump's tariff threats will ultimately be implemented also has uncertainties. The White House refused to explain the legal basis for implementing the tariffs throughout the weekend, and the relevant legal basis may face restrictions or even rejection by the US Supreme Court. Kevin Hassett, Director of the White House National Economic Council, said on January 18 that he had not been informed of the legal basis for the tariffs, but described this move as a negotiation strategy.
"The reason why the President can write 'The Art of the Deal' is because he is very good at making deals," Hassett told Fox News Channel. "I think now is a good time to calmly respond, we should put aside words and sit at the negotiation table to see if we can reach an agreement that is most beneficial to everyone."
Moreover, Trump's tariff measures have a significant loophole. Joseph Ford, professor at the Stern School of Business of New York University, pointed out that there are no borders between Spain, Italy, Germany and France, and member states subject to US tariffs can rearrange trade within the EU to avoid these tariffs. "If we try to impose tariffs on individual countries, anyone can easily transport goods through other countries."
Original: toutiao.com/article/7596990389479817738/
Statement: This article represents the views of the author.