Countering US Tariffs with the Anti-Coercion Instrument

Dive into the complex world of European Union (EU)-US trade relations as we break down the EU’s powerful anti-coercion instrument (ACI) and its potential deployment in response to President Trump’s 25% tariffs on EU products. Discover how this “trade bazooka” could level the playing field, from targeting big tech to imposing retaliatory tariffs, and learn how businesses can navigate and influence this high-stakes process. March 2025 is a crucial month for decisions and action. Find out what steps companies should take to protect their interests and supply chains in this short video.

Takeaways

• The EU’s anti-coercion instrument (ACI) is a powerful tool designed to combat economic threats and unfair trade restrictions from non-EU countries, introduced in 2023.
• The ACI was partly a response to Chinese restrictions on Lithuania in 2021 and previous trade disputes with the US under the Trump administration in 2018.
• The process for activating the ACI involves a four-month examination by the Commission, followed by an eight-week Council decision period, allowing for a maximum of 6 months to confirm a measure as economically coercive.
• The Commission, not the Council, has the authority to implement Union responsive measures (URMs) if the 3rd country does not cease its coercive actions within a reasonable timeframe.
• Potential EU responses to the 25% tariffs on EU products could include stricter licensing rules for digital services, revocation of IP protection, and restrictions on financial services and direct investment.
• Businesses are encouraged to map out their supply chains and develop contingency plans to mitigate the impact of potential tariffs, both from the US and the EU.
• Both EU and US companies can engage with the ACI process by providing information and influencing the Commission’s decision on responsive measures.