The possibility of the Trump administration imposing selective tariffs on a specific EU country, such as Denmark, represents an extremely complex challenge to the European project, even one that could jeopardise the very survival of the EU. This scenario – made even more delicate by the geopolitical context of Greenland – raises crucial questions about the internal cohesion of the Union and its ability to respond in a unified manner to a direct threat. The whole thing is made even more delicate by the fact that this threat comes from the Europeans’ historic main ally, on whom the latter moreover depend for their security.

The context of selective tariffs and Greenland

For the Trump administration, as the case opened and closed in a few hours with Colombia shows, the threat of tariffs is not just a rhetorical device, but a concrete instrument of political and economic pressure. Trump is often very explicitly underlining the fact of the trade deficit weighing on the United States vis-à-vis Europe, because it is precisely in trade between the two sides of the Atlantic that he has identified the tactical lever on which he intends to act to gain his advantages.

The first benefit that Trump wants to achieve concerns the expansion of the share of energy that Europeans buy from the US. For Trump, the end of the war in Ukraine must bring with it compensation for America for the military investment made in the defence of Kyiv, and for the tenant of the White House the primary compensation is the share of energy sold by the United States on European markets.
In the case of Denmark, then, the threat of duties takes a worrying leap forward: Trump is not threatening duties because of a more or less understandable economic compensation for the trade surplus, but because Denmark does not intend to open ‘negotiations’ (if it can be understood that way) for the annexation of Greenland to the United States. Washington – it is now well known – has expressed interest in acquiring the island, which is strategically important due to its natural resources and its position in the Arctic, but Danish Prime Minister Frederiksen has firmly refused any talks on the matter, calling the proposal‘absurd’.

The refusal irritated the US administration, which could then react with selective duties on Denmark to exert further pressure. What would the EU do at that point?

The European architecture in trade matters

To understand the scope of the EU’s possible responses, it is crucial to clarify the functioning of its trade architecture. The EU is a true customs union: this means that all 27 member states apply the same external tariffs towards third countries and have eliminated customs barriers within them. Furthermore, external trade is an exclusive competence of the EU, which negotiates and concludes trade agreements on behalf of all member states. This centralisation allows the EU to act as a single economic bloc, giving it greater negotiating weight in international disputes and protecting its members from external pressures. However, this model requires a high level of solidarity and coordination among member states to function effectively, especially in the face of threats such as selective tariffs.

The difficulties of implementing selective duties by the US

Imposing selective duties against a single EU country would present the US with a complex practical and legal challenge. Since the EU is a customs union, goods from any member state travel freely within the single market and are exported under a single European trade regulation. This means that once Danish goods have entered the internal market, they could be re-exported from other Member States without a clear distinction of origin. This would make it extremely difficult for the United States to apply targeted and effective customs controls on imports originating exclusively in Denmark. In addition, such duties could be challenged as discriminatory and non-compliant with WTO rules, exposing the US administration to possible legal and political retaliation. This logistical and regulatory complexity could limit the effectiveness of US pressure, pushing for alternative solutions or direct negotiations.

Possible responses from the European Union

The EU has several instruments at its disposal to respond to a selective imposition of duties on a Member State, but the effectiveness of such measures would largely depend on the internal cohesion of the Union and the ability to maintain a common line. The main options include:

1. Coordinated trade retaliation: The EU could respond by imposing tariffs on US-sourced goods, choosing strategic sectors that generate pressure on Washington. This approach, already tried during the Airbus and Boeing disputes, would serve to demonstrate the EU’s ability to defend its interests.
2. Recourse to the World Trade Organisation (WTO): Although the effectiveness of the WTO has been weakened in recent years, the EU could still use the dispute settlement system to challenge selective tariffs as a violation of international trade rules.
3. Anti-coercioninstrument: the EU could use the recently adopted anti-coercion mechanism, which allows the Union to respond quickly and with proportionate measures to attempts of economic coercion by third countries. This instrument, designed to protect European economic sovereignty, allows for the application of countermeasures such as targeted sanctions or trade restrictions, sending a clear signal of deterrence against further attempts at pressure.
4. Economic support to the affected country: The EU could also make use of the recently adopted anti-coercion instrument. This mechanism allows the EU to respond quickly and with proportionate measures to attempts of economic coercion by third countries, such as the imposition of selective tariffs, through targeted sanctions or other trade defence actions. The instrument aims to protect the EU’s economic sovereignty and to deter future attempts of external pressure by ensuring a coordinated and effective reaction. To preserve European solidarity, the EU could mobilise financial resources, through instruments such as the European Globalisation Adjustment Fund, to support the Danish sectors most affected by the duties.
5. Economic diplomacy: the EU could enter into direct negotiations with the US administration, seeking to defuse tension through a diplomatic approach and leveraging common interests, such as transatlantic security.

The anti-coercion instrument, in detail

The European Union’s Anti-Coercion Instrument (ACI) was conceived to counter undue interference by third countries in European policies through blackmail in the areas of trade and investment. Approved definitively by the European Parliament on 3 October 2023, the ACI aims to serve as both a deterrent and an active defence mechanism of the Union’s sovereignty.

In practice, the instrument allows the European Commission to investigate potential coercive practices by third countries and promptly intervene to resolve the issue. The main objective is to provide the EU with negotiating tools to convince the authorities of the third country to cease coercion. If negotiations are unsuccessful, the EU has a wide range of countermeasures at its disposal, including:

• Imposition of restrictions on the import and export of goods and services;
• Restrictions on intellectual property rights and foreign direct investment;
• Restrictions on access to the EU market, in particular to public procurement;
• Restrictions on the placing on the market of products subject to chemical and health regulations;
• Restrictions on access to EU-funded research programmes.

The instrument complements other trade defence measures adopted by the EU in recent years, such as those to counter distortionary foreign subsidies or environmental dumping, strengthening the Union’s ability to protect its economic and political interests. The adoption of the ACI is a significant step towards protecting the EU’s open strategic autonomy, ensuring a coordinated and effective response to external economic pressures.

The risk of internal divisions

A critical element in this scenario would be the pressure that would be put on individual member states to renounce a European solidarity approach. The US could try to divide the EU by offering bilateral concessions to other member states or by threatening broader retaliation. Recent history offers examples of how some European capitals have been tempted by separate deals in other trade disputes.

In the specific case of Greenland, the United States could exploit Denmark’s political isolation from other member states by pushing for a bilateral agreement bypassing the European Union. Denmark, as an affected country, could find itself in a particularly difficult position. On the one hand, it would need European support to mitigate the economic effects of the duties; on the other hand, it might be under internal and external political and economic pressure to find a separate solution with Washington.

What is at stake for the European project

The possible imposition of selective tariffs against Denmark would therefore be more than just a trade dispute: it would test the EU’s ability to act as a unified actor on the global stage. A fragmented response would risk undermining the external credibility of the Union as a trading and political partner, sending a signal of weakness internationally, and would devastate the legitimacy of the common institutions vis-à-vis public opinion in the member states. On the contrary, a cohesive and well-calibrated response would strengthen the image of the EU as an entity capable of defending its interests and those of its members, and would act as a ‘crush test’ for the future.

The stakes are even higher considering the geopolitical context of Greenland, whose control is crucial for access to Arctic routes and mineral resources. The EU’s ability to support Denmark in this dispute could consolidate the European role as a global player capable of protecting its borders and strategic interests.

The decisive test bench

The European Union is faced with the need to strengthen its trade defence instruments and to prevent possible internal divisions. Solidarity among member states is not only a fundamental value of the EU, but also a precondition for maintaining the political and economic weight needed to face global challenges. The response to selective tariffs against a member country like Denmark, in the context of the Greenland dispute, is a decisive test for the future of the European project, for the credibility of its foreign policy and for the protection of an enormous common value of all Europeans: their freedom to travel, trade and work without obstacles and barriers.