FT: Brussels might hit Silicon Valley with "bazooka" tool in potential US-EU trade war
If US President Donald Trump follows through on his threat to impose new tariffs on the EU, Brussels might hit Silicon Valley with a retaliatory measure some call a "bazooka".
According to Financial Times, the European Commission is preparing to use its "anti-coercion instrument" (ACI) in a potential trade dispute with Washington, according to two sources familiar with the plans.
Originally developed during Trump’s first term and later used as a deterrent against China, the ACI allows the EU to impose restrictions on trade in services if another country uses tariffs on goods as a tool of political coercion.
If activated, the ACI would enable the EU to target major US tech firms. One official said that "all options are on the table", calling the ACI the strongest response available under international law.
Officials argue that Trump’s previous threats – such as using tariffs to pressure Denmark into handing over Greenland or forcing the EU to drop enforcement measures against US tech firms – fall within the scope of this instrument.
When the ACI came into force in 2023, some EU officials dubbed it a "bazooka". It gives the EU a wide range of countermeasures, including revoking intellectual property protections or commercially exploiting them.
The mechanism also allows the EU to block foreign direct investments or restrict market access for banking, insurance, and other financial firms.
However, another official suggested that the EU could still manage the dispute without escalating it with new spheres such as services and intellectual property rights.
Last week, Trump declared he would "absolutely" impose tariffs on the EU, citing Brussels’ actions against US tech firms and the bloc’s trade surplus in goods.
He did not specify when the measures would take effect or whether the EU could negotiate a delay, as Canada and Mexico have done. Meanwhile, EU trade ministers met in Warsaw on Tuesday to discuss his threats.
The European Union's top diplomat Kaja Kallas previously stressed that a potential trade war between the US and Europe would be harmful to both sides.