The EU is planning to hit Silicon Valley with retaliatory measures if Donald Trump follows through on threats to impose tariffs on the bloc, in the first use of a Brussels "bazooka” that could drag services into a trade war, reported from the Financial Times.

The European Commission is looking to use its so-called "anti-coercion instrument” in a potential dispute with Washington, said two officials with knowledge of the plans, which would allow the EU to target US service industries such as Big Tech.

An official said "all options are on the table” and pointed to the ACI as the toughest response available without breaching international law. 

The tool, which was drawn up during Trump’s first term and subsequently used as a deterrent against China, allows the EU’s executive arm to impose restrictions on trade in services if it determines that a country is using tariffs on goods to force changes in policy.

Trump’s threat to use tariffs to coerce Denmark to hand over Greenland and to press the EU to drop enforcement action against US technology companies would qualify, officials said.

Dubbed a "bazooka” by some EU officials when it came into force in 2023, the ACI allows the bloc to select from a wide range of retaliatory measures, such as revoking the protection of intellectual property rights or their commercial exploitation, for example software downloads and streaming services.

It also allows the EU to block foreign direct investment or restrict market access for banking, insurance and other financial services firms.


A second official cautioned that while the EU was proficient in handling tariffs on goods, it could still balk at expanding a dispute into new areas including services and intellectual property rights.

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