The European Union's powerful Anti-Coercion Instrument (ACI), often described as a diplomatic 'nuclear option', has moved to the forefront of geopolitical discussions following renewed threats from US President Donald Trump regarding Greenland. Approved in 2023 after years of deliberation, this formidable tool provides the 27-nation bloc with an extensive arsenal of retaliatory measures designed to counter economic coercion from third countries.
Why the ACI is Being Considered Now
President Trump's recent threat to impose additional tariffs on eight European nations unless the United States is permitted to purchase Greenland has triggered serious discussions within EU capitals about potential responses. France has been particularly vocal in advocating for the deployment of the ACI, arguing that Trump's approach constitutes precisely the type of economic coercion the instrument was created to address.
The situation represents a significant escalation in transatlantic tensions, with Trump citing national security concerns as justification for his demands regarding the autonomous Danish territory. EU governments are now actively preparing retaliatory measures, with options ranging from traditional tariffs worth approximately 93 billion euros to the unprecedented activation of the Anti-Coercion Instrument.
The 'Nuclear Option': What the ACI Actually Does
The Anti-Coercion Instrument represents a substantial evolution in the EU's defensive capabilities against economic pressure. Unlike conventional tariff responses, the ACI offers a far broader spectrum of potential countermeasures that can be tailored to maximize impact on the coercing nation.
Comprehensive Retaliatory Measures Available
The instrument contains a detailed ten-point list of possible actions that the EU could implement against countries found to be engaging in coercive practices. These measures extend well beyond simple import and export restrictions to target multiple sectors where the United States maintains significant economic interests within the European market.
Among the most potent options available through the ACI are:
- Import and Export Controls: The EU could implement quotas, licensing requirements, or outright bans on specific goods flowing between the bloc and the United States.
- Public Procurement Restrictions: With European public tenders worth approximately 2 trillion euros annually, the EU could exclude bids where US goods or services constitute more than 50% of a potential contract, or apply penalty score adjustments to American bids in sectors like construction and defence procurement.
- Service Sector Targeting: Measures could specifically impact service industries where the US maintains a trade surplus with the EU, potentially affecting digital giants including Amazon, Microsoft, Netflix, and Uber.
- Investment and Intellectual Property Curbs: The instrument permits restrictions on foreign direct investment from the United States (the EU's largest external investor) and could limit protection of intellectual property rights, access to financial services markets, and the ability to sell chemicals or food within the bloc.
The selection of measures would be strategically determined to most effectively halt coercive behaviour and potentially repair any economic injury suffered by EU member states.
Activation Process and Timeline
The ACI was originally proposed in 2021 as a direct response to growing concerns within the bloc that both the first Trump administration and China had increasingly weaponised trade for political objectives. Its activation follows a carefully structured procedural framework designed to ensure legitimacy while maintaining operational effectiveness.
Under European law, the European Commission has up to four months to investigate potential cases of coercion. Should investigators determine that a foreign country's actions constitute coercive measures, this finding is presented to EU member states, who then have an additional eight to ten weeks to confirm the assessment through a qualified majority vote—a higher threshold than that required for implementing standard retaliatory tariffs.
Following confirmation, the Commission would typically engage in negotiations with the offending nation in an attempt to resolve the situation diplomatically. If these discussions prove unsuccessful, the EU can proceed to implement ACI measures, subject to another vote by member states. Implemented measures are designed to enter force within three months, though the complete process from initial investigation to full implementation could span anywhere from several months to a full year.
This deliberate timeline reflects the instrument's dual purpose: serving as both a credible deterrent against economic coercion and a measured response mechanism when diplomatic solutions fail. As tensions over Greenland continue to escalate, the EU's readiness to potentially deploy this 'nuclear option' underscores the seriousness with which Brussels views threats to its economic sovereignty and the cohesion of its member states.
