How Europe could fight against Trump’s prices

In the climbing of the trade war with the United States, European officials discuss the imposing obstacles to imports of American services with a commercial weapon that could allow the block to place restrictions on Big Tech and Wall Street.

“We have the power to repel,” Ursula von der Leyen, president of the European Commission said this week.

President Trump has already announced tariffs on aluminum, steel, cars and car parts, movements that could seriously pack the trembling economy of the block. Brussels replied by announcing that it would repair American imports such as Harley-Davidson motorcycles, whiskey and other goods, some of which were targeted during the transatlantic confrontation that Trump triggered during his first mandate.

To counter Mr. Trump’s latest reciprocal rates, European officials weigh the deployment of a political tool called the anti-coercion instrument, which some call a “bazooka”. The instrument, which was adopted in 2023 to retaliate in China but never used, is considered an option of last appeal if discussions with the Trump administration go south.

Brussels could adapt the tool to Go after the technology giants and American financial institutions. An outdoor plan that has circulated in recent weeks includes a nuclear option: limiting access to American banks to the huge EU public procurement market, which would partly mean the reduction of project banks worth around 2 euros of euros (2.2 billions of dollars) each year.

Another idea in the preliminary plan is to target the huge sums that Europeans invest each year in American companies, an annual flow of around 300 billion euros which has become an irritation point for EU officials. And finally, the preliminary plan indicates, Brussels “could also increase the tax and regulatory pressure on American digital platforms”.

The plan did not specify the scope, and even less how one or the other proposal could be put in place. But it has shown how political advisers think of the global level because the block weighs its approach.

“I personally think that Big Bazooka should first be used as a deterrent,” said Fabrizio Pagani, partner of the Vitale Investment Bank and former senior economic official of the Italian government, referring to the anti-coercion tool. “So put it on the table and negotiate.”

Olof Gill, a spokesperson for the European Commission, said the anti-coercion instrument was considered Brussels to haul its negotiation strategy. One point is that, although the European Union has accumulated a large trade surplus of goods, it at the same time raised a trade deficit of around 110 billion euros with the United States. Useing this point could be a key to negotiations, according to the advisers.

But some analysts and economists fear that such a lasting online negotiation can turn against him.

“Services prices, as well as property prices, directly strike consumers and businesses,” said Joachim Klement, head of the Panmure Liberum investment bank strategy, adding that it would be an infallible way to degenerate the trade war.

“You just put fuel on the stagflationist fire,” he added.