What the EU “Trade Bazooka” Actually Is

In simple terms:

· It’s a defence and deterrence mechanism the EU can use when another country uses trade, tariffs, investment pressure or other economic levers to try to force the EU to change its policy or behaviour.

· It was adopted as Regulation EU 2023/2675 and officially came into force in December 2023.

People and media call it a “bazooka” because — on paper — it gives the EU one of its broadest and toughest sets of counter-measures in trade policy, not limited to simple tariffs.

What the ACI Can Do (Why It’s Called a “Bazooka”)

If the Commission determines that a third country’s actions amount to economic coercion, and dialogue fails, it can propose countermeasures, including:

· Tariffs or quotas on goods and services from the coercing country.

· Restrictions on foreign direct investment (FDI) into the EU.

· Limits on access to EU public procurement (government contracts).

· Barriers affecting financial services and capital markets.

· Even trade-related intellectual property measures (like suspending or restricting rights).

This range goes well beyond traditional WTO retaliation and is one reason officials refer to it as a “trade bazooka” — i.e., a strong deterrent, especially against major economies.

When and Why It Was Created

The Anti-Coercion Instrument was developed in response to growing concerns that major trading partners, especially powerful states, could use economic muscle to influence EU policy.

Examples cited in debates include:

· Previous U.S. tariffs on steel and aluminium under Section 301.

· China’s restrictions on trade with Lithuania over diplomatic ties with Taiwan.

Unlike classic trade defence tools (which require clear WTO rule breaches), the ACI focuses on intent and coercion — i.e., whether trade measures are being used to influence EU policy decisions.

Current Context: Why It’s in the Headlines

In January 2026, French President Emmanuel Macron urged the EU to consider activating the ACI in response to new proposed U.S. tariffs on several NATO allies (including France and Germany), tied to a high-profile dispute over Greenland.

These U.S. threats to impose tariffs starting at 10 %, rising to 25 %, have been widely described as coercive since they are linked to political leverage, not normal trade disputes — prompting talk of firing the EU’s “trade bazooka.”

So far, the Anti-Coercion Instrument has never been used in practice, and EU leaders are balancing diplomatic efforts with the possibility of activation.

What It Does — and Does Not — Mean

What It Means

· The EU has a formal legal mechanism to respond to economic pressure that’s broader than classic counter-tariffs.

· It signals that the EU is prepared to defend policy choices against external economic pressure.

· It creates leverage in high-stakes trade disputes, especially with major partners like the U.S. and China.

What It Does Not Necessarily Mean

· That the EU will automatically deploy drastic measures — it must first assess coercion and then decide to act.

· That its use is immediate or inevitable in every trade dispute