Trade “bazooka”, here we go. European Parliament could request activation against US threats.

From our correspondent in Strasbourg – While Donald Trump lashes out at the European Union from the stage in Davos, and EU leaders attempt a desperate reconciliation in the corridors of the World Economic Forum ahead of tomorrow’s extraordinary summit, the European Parliament is taking the initiative in responding to the White House’s threats. The first step, formalised today (21 January), is to suspend work on implementing the EU-US trade agreement on tariffs. The second step, which will be discussed on Monday, 26 January, could be to request the activation of the anti-coercion instrument, the trade “bazooka” available to Brussels.

“I expect the coordinators of the European Parliament’s International Trade Committee (INTA) to decide to request the initiation of the anti-coercion instrument investigation procedure,” announced Bernd Lange, Socialist MEP and chair of the INTA committee. Lange himself said he was “personally in favour”, pointing out that “the instrument was created precisely for cases like this.”

Cases in which a third country is posing serious trade threats to the EU: Trump “is using tariffs as a coercive tool”, acknowledged Lange and the rapporteurs of the various political groups who today formalised the decision to suspend work on the EU-US trade agreement signed this summer in Scotland. 

Once the request has been received, the European Commission would have four months to conduct an investigation into Trump’s threats, the first step in a long process that includes a phase of dialogue with Washington and an assessment of the tools available for a possible response. The Commission could submit a proposal for retaliation to the EU Council, which the capitals would then have to approve by a qualified majority. 

By activating the instrument, the EU could impose new or higher customs duties, restrict trade in goods, services and investments, apply restrictions on intellectual property rights, and reduce US operators’ access to the EU public procurement market. 

Meanwhile, Lange suggested that further and faster steps could be taken, such as unblocking the €92 billion in tariffs on American goods agreed in July and suspended once the agreement was reached. “It had been postponed because of the agreement in Scotland, but the list is still there, all the regulations are ready, and we can implement it immediately,” the German socialist pointed out. 

Among the MEPs called upon to discuss the “bazooka” is Jörgen Warborn, coordinator of the European People’s Party in INTA. Warborn remained more cautious, explaining that Trump and several European leaders are currently in Davos and “there is therefore a window of opportunity to resolve the issue diplomatically.” However, he did not rule out the option, which has never been so likely until now.