Europe’s ‘mice’ must find their inner tigers to roar back as Trump turns tariffs into weapons over Greenland

Whatever the intent, it hasn’t worked. Trump’s contemptuous delight in beating up US allies was given free rein over the weekend as he raised the ante over the Arctic territory. It’s time for Europe to fight tariff fire with fire.

The US president threatened a 10% duty from 1 February on US imports from the countries sending troops: France, Germany, Sweden, Finland, the Netherlands, Denmark and non-EU members Norway and the UK. That would increase to 25% in June until a deal is reached for his government to buy Greenland.

In a grim flashback to last year’s EU-US trade deal when the bloc had to swallow a 15% tariff, the underbelly of Europe’s trade-dependent, soft-power regime is fully exposed.

The cost of such extra tariffs would be high. Bloomberg Economics estimates they could cut these countries’ US exports by up to 50%. Germany, Sweden and Denmark look especially vulnerable. But another timid acquiescence from the Europeans would be disastrous.

This is textbook economic bullying. If last year’s tariff deal is already being rewritten on the fly by the US, where will it stop? There has to be a point when even mice do more than squeak apologetically and submit to worse trade terms than China.

So even as Germany appears to be shipping its dozen or so soldiers back home, European leaders must be ready to play hardball if these levies materialize. The starting point is bolstering the European Parliament’s threat to hold back approval of last year’s trade agreement, which was hailed by Trump’s administration as providing “unprecedented levels of market access" for American products.

The deal has not stopped the US from trying to strongarm Brussels into going easy on the tech barons of Silicon Valley and Seattle over regulations and antitrust issues.

It is time, too, to unbox the EU’s ‘bazooka’ for the fight ahead: The bloc’s Anti-Coercion Instrument is explicitly designed to defend member states put under tariff pressure by foreign powers. It allows retaliation beyond customs duties and can potentially restrict market access for titans like Google owner Alphabet.

French President Emmanuel Macron, still nursing his wounds after failing to stop an EU trade deal with Latin America hated by French farmers, favours this trade weapon—and he’s been backed by German industrial association VDMA. “Europe must not allow itself to be blackmailed," its president wrote over the weekend.

Then comes the longer-term question of whether Europe can get by on defence and security without American backing—in Ukraine first and foremost—the answer to which was a resounding ‘no’ last year when the EU had to accept America’s 15% levy. But just as those transatlantic trade terms have barely survived the New Year, last year’s rush to declare Nato as being back and better than ever under Trump looks wildly premature.

Denmark is right to say that a hostile takeover of Greenland would be the end of the alliance as we know it. Trump’s new threats go beyond the Nato “brain death" that Macron spoke of a few years back, and towards something like the forced obedience of the Soviet bloc’s Warsaw Pact. To avoid this miserable fate, the rearming of Europe is ever more urgent.

European unity will be found wanting. Poland and Italy are not on the tariff list and will try to de-escalate. Trump’s continental MAGA allies can be counted on to sow discord. The UK, under the cautious stewardship of Prime Minister Keir Starmer, may pursue its own routes to exemptions.

Nor will Europe be under any illusion: If the White House is determined to take Greenland in the face of opposition from the American public, US Congress, the EU, Nato and the overwhelming majority of Greenlanders, it will succeed.

But if the status of American ally means being subjected to trade and technological subservience rather than being lavished with Cold War-style aid, cutting loose would be preferable. Trump’s unnecessary aggression over Greenland may well become that moment. Canada is getting closer to China, even though it shares an 8,890km border with the US.

In today’s White House, reality has outpaced fiction. Europe’s mice must quickly find their inner tigers. ©Bloomberg

The author is a Bloomberg Opinion columnist writing about the future of money and the future of Europe.