I had never heard of the EU's Anti-Coercion Instrument until today but suddenly it is all we are hearing as EU countries meet to decide how to respond to Donald Trump imposing Tariffs on essentially all the EU nations over Greenland.
From what I am hearing, their are 3 options up for discussion with the first being holding fire and waiting to see if the man who is famously called TACO, does indeed chicken out over the next few days as Trump has repeatedly threatened tariffs against countries only to then delay, reduce or quietly scrap them and with US markets Nasdaq pre-market trading showing a fall of 1.5%, that is a possibility.
The second option is to do nothing as this weekend the EU signed a major free trade agreement with five South American countries known as the Mercosur bloc which they think will soften the blow of what they lose in the US market, leaving the American consumers the only losers.
Thirdly is the Anti-Coercion Instrument which is being pushed hard by the French President Emmanuel Macron and involves imposing retaliatory tariffs on the US, limiting US investment and trade with Europe and restrict access to the Worlds largest single market.
There is unanimous agreement in European capitals that a forced seizure of Greenland cannot be allowed but there as yet, is no agreement in yet on how to respond and the discussion is being assessed by each leader with the fear that the ACI would almost certainly prompt a backlash from Trump and deepen the looming trade war.
Almost everyone has already agreed to delay the ratification of the EU-US trade deal that was agreed last summer but as the new tariffs won't kick in until 1 February, the EU feel the time gives the EU a window to decide and act.
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