EU Draws Up €93 Billion Tariff Retaliation Plan as Trump Escalates Greenland Threats

The European Union is preparing a sweeping package of retaliatory measures against the United States, including tariffs worth up to €93 billion ($107.71 billion), in response to threats by US President Donald Trump to annex Greenland, according to a Financial Times report published on Sunday evening.

Brussels is also examining the possibility of limiting access for US companies to the European market as part of a broader response. The measures were discussed during a meeting of EU ambassadors on Sunday and are intended to strengthen the EU’s hand ahead of anticipated talks with Trump at the World Economic Forum in Davos later this week.

The discussions come amid mounting concern across Europe that Trump’s latest threats represent a dangerous escalation in the use of trade policy to achieve geopolitical objectives.

According to officials cited by the Financial Times, the tariff package is designed to give European leaders greater leverage in their meetings with the US president in Switzerland.

Earlier on Sunday, eight European countries considered most exposed to potential US tariffs — Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden and Britain — issued a joint statement warning that Trump’s approach could seriously damage relations across the Atlantic. They cautioned that the threat of tariffs would “undermine transatlantic relations and risk a dangerous downward spiral,” while reaffirming their backing for Greenland.

In the same statement, the eight countries emphasized their shared security interests in the region, declaring: “We are committed to strengthening Arctic security as a shared transatlantic interest.”

Against this backdrop, British Prime Minister Keir Starmer held a phone call with Trump on Sunday. According to Downing Street, Starmer told the US president that “imposing tariffs on allies who seek the collective security of NATO allies is wrong.” The call came as Trump confirmed that a new wave of tariffs would begin on February 1.

Speaking on Saturday, Trump said he would impose an initial 10% tariff, which would then rise to 25% on June 1 and remain in place until a deal is reached on the US purchase of Greenland.

German industry leaders reacted sharply to the US president’s statements, with business associations condemning what they described as “unacceptable financial blackmail.” Trump is reportedly prepared to further escalate tariffs on European exports in an effort to pressure Denmark into selling Greenland to the United States.

Representatives of major German business groups characterized the demands as “unreasonable” and warned of the dangers of linking political goals to trade sanctions. According to industry figures, such tactics risk setting a precedent: if the European Union yields now, it could invite further demands and future threats.

Germany finds itself in a particularly vulnerable position. Its export-driven economy is only just beginning to recover after two years of stagnation, and any escalation in global trade tensions would directly affect demand for core German exports, including automobiles, machinery and chemicals.

Business leaders caution that tariffs are not merely negotiating tools, but measures that inflict real harm on the economy, investment and, ultimately, employment. Industry associations and chambers of commerce are urging Brussels to present a united and resolute front.

Among the options under discussion is the possible activation of the EU’s so-called “Anti-Coercion Instrument,” a mechanism that would allow the bloc to take countermeasures against third countries that apply economic pressure for political purposes. The tool has never been used before, but it is now being seriously considered.

At the same time, concerns are growing about whether European ratification procedures for the EU-US trade agreement can move forward while Washington continues to threaten new punitive tariffs.

The situation is further complicated by uncertainty over how Trump’s latest Greenland-related tariff threats would interact with existing US tariffs on British and EU goods.

Trade and tariff policy remains highly complex, but there is a general outline of the key changes Trump has made since returning to the White House last year, prior to his most recent announcement.

Under a deal reached in July, the EU and the US agreed to impose a 15% tariff on most goods, down from the original 30% Trump had threatened. In the case of the UK, most products are subject to a 10% tariff.

For automobiles, a 10% tariff applies to a quota of 100,000 vehicles, after which the rate rises sharply to 25%. Steel and aluminum imports face a 25% tariff, while an agreement reached in December established zero tariffs on pharmaceutical products.

As part of the July agreement, some US exports to the EU were set to benefit from zero tariffs. However, those provisions are now at risk, as the deal has yet to be ratified by the European Parliament and could be jeopardized by the latest escalation.

Compounding the pressure, most steel and aluminum imports from around the world — including those from the EU — are now subject to a 50% tax imposed by the United States.

With tensions rising and negotiations looming in Davos, European leaders are hoping that the threat of substantial countermeasures will deter further escalation and force Washington back to the negotiating table.

By fLEXI tEAM