Trump's Gunboat Diplomacy: EU's Possible Response?
It has been a bit over a week since Donald Trump was inaugurated as the 47th US president. The world is adjusting for a second time to the constant state of uncertainty caused by his actions. Neighbouring countries such as Canada and Mexico have already had to scramble to display their willingness to accommodate whatever policy the US president has in mind, lest they become the target of crippling tariffs. All of a sudden, the very existence of Canada as a sovereign nation seems in doubt, with Trump openly musing about Canada becoming the 51st US state.
For the European Union, the second Trump presidency brings uncertainty as well. President Trump wants the US to ‘buy’ Greenland, and, if no price can be agreed, take over the island through economic or even military coercion. At the World Economic Forum, he has been criticizing the EU’s trade policy as ‘very unfair’.
Not all is bad news, however. On Ukraine, firmness seems to be the order of the day, perhaps because Donald Trump senses (economic) weakness in Russia.
How should the European Union address a United States administration that advocates and potentially implements 19th-century-style gunboat diplomacy, while openly threatening to annex territory of an EU Member State? (To recall: Greenland is an Overseas Country and Territory (OCT) associated with the European Union through Denmark.)
The EU has spent the past decade developing unilateral trade tools to navigate the new global landscape. Will the EU dare to use these instruments against its key ally, who ensures European security?
The Anti-Coercion Instrument
Adopted in 2021, the Anti-Coercion Instrument enables the Commission to take various actions against 'economic coercion' by a third country targeting the EU or a Member State. It is only slightly ironic that the instrument was introduced not with the US but with China—a ‘systemic rival’—in mind. Shortly before the introduction of the Anti-Coercion Instrument, China had embargoed Lithuanian products after the Baltic country had allowed Taiwan to open a representative office in Vilnius.
During the legislative process leading up to the adoption of the Anti-Coercion Instrument, the Commission had maintained that the instrument was meant as a deterrent, as a signaling device to prevent economic coercion practices from taking place in the first place. The instrument appears to have failed to achieve the desired effect for the second Trump administration.
For the Commission to adopt measures under the Anti-Coercion Instrument, the Council, which represents the Member State executives, would have to first establish that economic coercion is indeed being practiced. It has to do so by qualified majority. This assessment is as much political as it is legal. International law offers hints of what economic coercion could mean, but ultimately the necessary supermajority within the Council has to materialize. In this context, it is worth noting that the US president's has said explicitly that the US will use ‘military or economic coercion’ if necessary to ‘get’ Greenland. The US's intentions seem clear. Yet whether subjective intentions are sufficient to sway the Council seems unlikely.
Are there alternatives?
While the qualified majority requirement set out in the Anti-Coercion Instrument is a high threshold, it is notably a lower bar than the one that has to be met to impose restrictive measures within the Common Foreign and Security Policy (CFSP). Experience with Russia reveals how difficult it has become to reach unanimity to impose restrictive measures. ‘Sanctioning’ the US in the same way as Russia has been sanctioned seems improbable, which makes action through the Anti-Coercion Instrument the likely channel to respond should the US president translate his tweets into action.
Regardless of what instrument will be used, it is clear that both sides would lose from a trade war. Whether anyone in Washington still cares, seems doubtful.
