Flags of the European Union fly outside the EU headquarters in Brussels, Belgium, on December 19, 2025. (Photo by Jonathan Raa/NurPhoto via Getty Images)
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Greenland’s Prime Minister Jens-Frederik Nielsen stood firm on the island’s self-governance, saying on Monday that the “latest statements from the US, including threats of tariffs, do not change that line. We will not be pressured,” according to a Google translation.
Europe is reportedly mulling bringing out its trade “bazooka” and imposing 93 billion euros ($108 billion) worth of tariffs on the U.S., in response to President Donald Trump threatening to hit eight European countries with tariffs if a deal over the sale of Greenland isn’t reached.
At an emergency meeting in Brussels on Sunday afternoon local time, France pushed for the European Union to use the “Anti-Coercion Instrument,” reported the Financial Times.
According to the EU, the instrument is designed to deter “economic coercion” that pushes for policy changes that could affect trade and investment in the bloc. Retaliation can involve not just measures in trade and financial markets, but also “trade-related aspects of intellectual property rights” and “public procurement.”
The range of repercussions has caused the ACI to be seen as a nuclear option against Trump’s tariffs. That’s also why not all EU members are up for its deployment. Germany has tended to be more reticent about using it partly because its economy is more dependent on exports, Carsten Nickel, deputy director of Research at Teneo, told CNBC.
But wherever you are on the continent, there’s no escaping Trump’s tariffs. Sectors most exposed include the auto industry, which count Germany’s BMW and Milan-listed Stellantis as members, luxury names such as France’s LVMH and Kering, and Denmark’s and Switzerland’s pharmaceutical giants Novo Nordisk and Roche, respectively.
Markets were rattled by the news. Futures tied to the Dow Jones Industrial Average indicate that the index is set to open Tuesday with a drop of 378 points. European stocks broadly fell on Monday, while safe-haven assets gold and silver shot up to hit new highs, just days after breaking previous records.
And that’s just the reaction from the first round of tariffs from Trump. If the EU does hit back, whether with retaliatory tariffs or its trade bazooka, expect the fallout to be bigger and more widespread.
— CNBC’s Holly Ellyatt contributed to this report.
What you need to know today
Europe weighs using trade ‘bazooka’ against the U.S. France on Sunday reportedly pushed for the EU to use its strongest economic counter-threat to the U.S., known as the “Anti-Coercion Instrument,” to retaliate against Trump’s Greenland tariffs.
Powell to attend Supreme Court arguments. The Federal Reserve chair plans to attend oral arguments on Wednesday at the U.S. Supreme Court, in a case challenging the power of Trump to fire Fed Governor Lisa Cook, a person familiar with the situation told CNBC.
Putin invited to join Trump’s ‘Board of Peace,’ Kremlin says. The council, created by Trump last year, is seen as a vehicle to oversee the reconstruction of Gaza. Trump reportedly wants nations to pay $1 billion for permanent seats on the board.
U.S. futures fall. On Monday night stateside, stock futures indicated major indexes were poised to open lower, with a drop of more than 300 points for the Dow. Markets were closed for a holiday. The pan-European Stoxx 600 lost 1.19% as shares of auto giants tumbled.
[PRO] Europe has an edge amid Greenland tariffs. That’s according to Deutsche Bank analysts, who said that “the U.S. has one key weakness” that could give European countries leverage.
And finally…
Trump is going to Davos — here are the big names who aren’t
U.S. President Donald Trump is attending the World Economic Forum’s annual meeting in person, the first time since he addressed the forum during his first term in 2020. This time, he will bring the “largest” U.S. delegation yet, according to WEF.
Danish government representatives were invited and decided not to attend, a WEF spokesperson said on Monday, as the dispute over Greenland intensified. Chinese President Xi Jinping is not on WEF’s attendance list, and neither are the leaders of Brazil and India.
— Lucy Handley