EU and the ACI

The European Union is increasingly contemplating the potential use of its anti-coercion instrument (ACI) in response to expected trade pressures from the Trump Administration’s ongoing tariff wars.  

The ACI, adopted in 2023, enables the EU to investigate and respond to economic actions by non-EU countries that seek to force policy changes through coercive means. With Donald Trump signaling 30% tariffs on August 1, 2025, and a return to aggressive tariffs - including a possible 15% universal import tax, the EU is concerned that such measures could constitute economic coercion under the ACI framework.

Brussels views Trump’s proposed trade policies as politically motivated attempts to extract concessions or shift EU policy, particularly on defense spending, trade imbalances, and relations with China. While invoking the ACI against the U.S. would be politically sensitive and economically risky, it is now a credible option under discussion – especially in light of the bloc’s largest member, Germany, seemingly willing to opt for the nuclear option of implementing the ACI in recent comments.  

In addition, the bloc’s perceived “little brother” inferiority against the US could be mitigated by  invoking the ACI against the US.  It could be seen as a demonstration of EU strategic autonomy - a long-sought goal in Brussels by showing that the EU is willing to stand up to any economic pressure, even from allies, in defense of its industrial base and regulatory sovereignty.

However, using the ACI against the US would be fraught with political risks. The transatlantic alliance is foundational to EU foreign and security policy, especially amid global instability. Any overt use of trade retaliation against Washington could strain NATO unity and broader geopolitical cooperation. It might also provoke a US response, igniting a damaging trade war between two of the world’s largest economies.  Furthermore, despite claims to the contrary, the EU would not likely want to risk its relationship with the US – its second largest trade partner in goods, and its largest trade partner in goods + services.  It would be economic suicide.

Despite these risks, the mere existence of the ACI gives Brussels a strategic bargaining chip. Even if not formally activated against the US, the instrument’s deterrent effect may help the EU gain leverage in negotiations over subsidies and trade rules. Quiet threats of its use could be enough to push the US toward adjustments or exemptions for European firms, as occurred in the case of initial EU-US talks over the Biden Administration’s failed Inflation Recovery Act’s implementation.

In summary, while using the anti-coercion instrument against the US remains unlikely due to the deep political and economic ties between the two powers, the ACI’s legal framework does allow for such a possibility. If transatlantic trade tensions escalate enough in dealing with Trump tariffs, Brussels may increasingly consider the ACI not just as a defensive mechanism but as a tool to assert parity.  This is a worst-case scenario and markets will sell off worse than Trump’s April 2 – Liberation Day.