U.S. Treasury Criticizes EU’s Response to Greenland Tariffs

U.S. Treasury Secretary Bassett expressed skepticism about the EU’s quick response to Trump’s proposed ‘Greenland Tariffs’ during a forum in Davos, Switzerland, on January 20.

Bassett’s comments highlight concerns over EU decision-making inefficiencies, potentially impacting transatlantic trade dynamics amid substantial geopolitical tensions.

Bassett’s Doubts on EU’s Greenland Tariffs Strategy

U.S. Treasury Secretary Bassett, during the World Economic Forum in Davos, expressed doubts about the EU’s swift response to the U.S.’s “Greenland Tariffs.” Bassett suggested that the EU would likely form a “dreadful European working group” as its initial step, a decision he views as the union’s strongest possible reaction. This response stems from what Bassett perceives as the EU’s lack of decision-making efficiency amidst its 27 member states.

“The ability of the EU’s internal mechanisms to align swiftly is often overestimated,” Bassett remarked. Bassett’s comments signal a potential lack of immediate resolution in trade tensions between the U.S. and the EU. He noted that the activation of the EU’s counter-coercion instrument might face delays, possibly hampering complete access for U.S. companies into the EU single market. This situation could reflect broader economic coercion challenges faced by the EU in the current global trade climate.

Washington’s overall reaction appears dismissive of the EU’s ability to deploy its counter-coercion strategies efficiently. Bassett remarked to reporters that despite having this regulatory tool, “I think they will first establish that ‘dreadful European working group.’” The sentiment from Bassett’s statements suggests that the anticipated actions might lack the impact needed for an effective response.

EU’s Counter-Coercion Instrument Faces First Major Test

Did you know? The EU’s Anti-Coercion Instrument, initiated in late 2023, aims to counteract economic pressures but has never been deployed against a significant trade partner like the U.S., potentially testing its effectiveness in practice now.

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Coincu’s research team notes that the EU’s delay in activating the counter-coercion instrument may lead to protracted trade tensions. With potential restraints on market access, U.S. firms might face challenges, increasing the stakes for both sides. Historical trade conflicts underline these geopolitical tensions.