EU Aims ‘Bazooka’ at Big Tech in Response to Trump Tariffs

The European Union is reportedly prepared to retaliate if President Donald Trump imposes threatened tariffs.

That retaliation could come in the form of restrictions on trade in services against American Big Tech companies, the Financial Times (FT) reported Wednesday (Feb. 5).

Two officials with knowledge of the European Commission’s plans say the regulator could use this “anti-coercion instrument” (ACI) in a potential dispute with Washington. One official said that “all options are on the table” and cited the ACI as the toughest response available to Europe without violating international law.

The ACI, developed during Trump’s first presidency and since used as a deterrent against China, has been called a “bazooka” by some EU officials. It would let Europe take steps like revoking intellectual property rights protections or their commercial uses — for things like software downloads and streaming services, the FT said.

The tool also lets Europe block foreign direct investment or curb market access for banking, insurance and other financial services companies.

The discussions are happening after Trump threatened to use tariffs as a way to push Denmark into giving the U.S. control of Greenland.

Trump had campaigned on the idea of imposing tariffs on China, Mexico and Canada as a way to get better trade deals and boost American manufacturing.

The idea had sparked concerns from a variety of corners, including the National Retail Federation, which pointed out that the cost of the tariffs would be passed on to U.S. consumers.

Leading up to this week’s scheduled deadline, groups including the U.S. Chamber of Commerce and the Wall Street Journal editorial board had called on Trump to hold off.

Before the tariffs on Mexico and Canada could begin, the leaders of both countries — which had been set to impose retaliatory tariffs of their own — spoke with Trump and each worked out deals that put the tariffs on hold.

Tariffs on China — a 10% levy on its imports — are now in effect, with China’s own tariffs on U.S. goods scheduled to begin next week.

As PYMNTS wrote earlier this week, the tariffs have companies rethinking their supply chain strategies to keep disruptions to a minimum and optimize costs.

“Many companies are reshoring manufacturing, expanding U.S. manufacturing capabilities, and searching for reshoring and friendshoring opportunities with countries less likely to experience tariffs. At a minimum, proactive companies are moving a portion of their supply chains to address these risks,” Lisa Anderson, founder and president of LMA Consulting Group, told PYMNTS in an interview.