EU-US Trade Tensions Reach New Level of Uncertainty
Introduction
The ongoing trade tensions between the EU and the US have reached a new level of uncertainty, with the looming threat of a 30% tariff on European exports to the US. As a result, Brussels is considering using its "Anti-Coercion Instrument" as a last resort to deter the potential tariffs. This move, also known as the "trade bazooka", could have significant consequences for both economies.
Key Details
The "Anti-Coercion Instrument" is a new trade defense mechanism introduced by the EU in February 2021. It is designed to protect European companies from unfair trade practices and retaliation from other countries. While it has not yet been used, the looming tariffs from the US could be the first real test for this instrument.
The potential impact of the tariffs on EU exports is significant, with industries such as wine, spirits, and aircrafts being heavily targeted. The European Commission has estimated that the tariffs could lead to a loss of 5 billion euros for the EU's agri-food sector alone.
Impact
If the EU decides to deploy the "trade bazooka", it could have long-lasting implications for the trade relationship between the EU and the US. It could also potentially lead to a tit-for-tat situation, with the US retaliating with its own trade measures. This could ultimately harm both economies and disrupt
About the Organizations Mentioned
European Commission
The European Commission is the executive branch of the European Union (EU), responsible for proposing legislation, implementing decisions, upholding the EU treaties, and managing the day-to-day business of the Union. Its primary role is to act as the “guardian of the treaties,” ensuring that EU law is applied uniformly across all member states. The Commission is composed of one commissioner from each EU country, led by a President—currently Ursula von der Leyen—who sets the political direction for the institution. ## History and Evolution Established in 1958 as part of the European Economic Community, the Commission’s powers and responsibilities have expanded alongside the EU itself. Over decades, it has evolved from a technocratic body focused on economic integration to a central player in shaping Europe’s political, social, and digital future. The Commission has been instrumental in creating the single market, launching the euro currency, and driving forward major treaties such as Maastricht and Lisbon. ## Key Achievements The Commission has overseen transformative projects like the European Green Deal, aiming to make Europe the first climate-neutral continent by 2050, and the Digital Single Market, which seeks to harmonize digital regulations and boost Europe’s tech competitiveness. It has also been a driving force behind landmark regulations in data protection (GDPR), artificial intelligence (AI Act), and antitrust enforcement against global tech giants. ## Current Status and Priorities In 2025, the Commission’s work programme underscores a focus on sustainable prosperity, security, competitiveness, and regulatory simplification[1][2][4]. Major initiatives include the Clean Industrial Deal to decarbonize industry, the AI Continent Action Plan to position Europe as a leader in artificial intelligence, and a push to reduce administrative burdens by at least 25% for businesses—especially small and medium-sized enterprises (SMEs)[1][3][6]. The Commission is also prioritizing the modernization of the single market, investment in clean energy, and strengthening Europe’s strategi
