Anti-Coercion Instrument (ACI)

Pressure is mounting on European leaders to deploy the European Union’s so-called “trade bazooka” after former US President Donald Trump threatened fresh tariffs if Denmark does not agree to sell Greenland. The remarks have triggered concern in Brussels over economic coercion targeting an EU Member State.

What Is the EU’s ‘Trade Bazooka’?
The instrument in question is the Anti-Coercion Instrument (ACI), often dubbed the EU’s trade bazooka. Adopted in 2023, it was designed to protect the EU and its Member States from economic coercion by non-EU countries through measures affecting trade or investment.

Why the ACI Was Created
The ACI was framed against the backdrop of growing global assertiveness, particularly by the United States and China, the world’s two largest economies. It responds to the increasing use of tariffs, trade restrictions, and the weaponisation of natural resources to push national interests.

What Constitutes Economic Coercion?
Under the ACI, economic coercion refers to situations where a non-EU country unduly interferes in the policy choices of the EU or its Member States by applying or threatening measures that affect trade or investment flows.

Primary Objective: Deterrence
The EU has emphasised that the main objective of the Anti-Coercion Instrument is deterrence. Ideally, its mere existence should prevent coercive actions, meaning the instrument is most successful when it does not need to be used.

Response Options Under the Instrument
If coercion does occur, the ACI enables the EU to:

• Formally identify instances of economic coercion
• Seek resolution through dialogue and engagement
• Impose countermeasures, if necessary, to protect EU interests

Growing Calls for Action
With Trump’s tariff threat linked to Greenland—an autonomous territory within the Kingdom of Denmark—calls are intensifying for Brussels to activate the ACI, marking a potential test case for the EU’s strongest trade defence mechanism.