August 1 looms for many of the USA's trade partners, including Canada, when large tariffs threaten
if an agreement has not been reached. This morning, an interesting insight into what the EU could
do.
In effect, European lawmakers have not been idle on the trade relationship front. Passed in 2023,
the EUpossesses an Anti-Coercion Instrument (ACI), meant to respond to excessive demands from
trade partners:
"Those responses — whose aim is "always to induce the cessation of the coercion" can go beyond retaliatory counter-tariffs, with the instrument also allowing for import and export restrictions on goods and services, but also on intellectual property rights and foreign direct investment.
Additionally, the anti-coercion measures allow the EU to impose various restrictions on access to the EU market, notably to public procurement, as well as the ability of U.S. suppliers to sell food and chemicals in the bloc.
Use of the instrument could also lead to measures affecting services in which the U.S. has a trade surplus with the EU, according to Reuters, including those from digital services providers Amazon, Microsoft, Netflix or Uber.
The European Commission notes that the EU's response measures must be "proportionate to the harm they counter, and must be targeted and temporary," applying as long as the perceived coercion prevails."
Thus the EU responds, while signaling it wishes a return to looser measures.
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