Here's a sentence you probably didn't expect to read in 2025: The European Union and the United States are in a tariff standoff over Greenland. Yet here we are, and Brussels is reportedly dusting off what some are calling a trade policy "bazooka" that's been sitting in the arsenal since 2023, completely unused.

The Nuclear Option Nobody's Tried Yet

According to The Wall Street Journal, the EU is exploring a range of responses to counter U.S. tariff threats stemming from European opposition to President Donald Trump's plans for Greenland. The options on the table include traditional trade retaliation, scaling back defense cooperation, and potentially deploying this never-before-used trade weapon.

So what exactly is this "bazooka" instrument? Adopted in 2023, it's officially known as the anti-coercion tool, and it grants the EU remarkably broad powers. We're talking export controls, tariffs on services, curtailed intellectual-property protections, and the ability to exclude U.S. companies from public procurement contracts across the entire bloc. It's comprehensive, to put it mildly.

Deploying it isn't simple, though. The European Commission would need approval from a qualified majority of member states—basically just over half of them, representing at least 65% of the EU's population. That said, don't expect dramatic action immediately. The bloc isn't likely to make major moves before new tariffs kick in on February 1.

French President Emmanuel Macron has reportedly been pushing for the EU to activate this anti-coercion instrument, according to the Financial Times. Meanwhile, EU Commission President Ursula von der Leyen confirmed on Sunday that she'd spoken with Macron, Italian Prime Minister Georgia Meloni, U.K. Prime Minister Keir Starmer, and German Chancellor Friedrich Merz, expressing unified support for Greenland.

A Billion-Dollar Deal at Risk

U.S. Trade Representative Jamieson Greer is essentially asking the EU to compartmentalize here—keep the Greenland tariff spat separate from broader U.S.-EU trade relations. He's suggesting the EU could "silo" the Greenland issue to avoid turning it into a larger trade war.

That's a big ask, considering what's on the line. Last July, the U.S. and EU struck a massive trade agreement that was expected to benefit American LNG exporters and the tech sector significantly. The deal committed Europe to purchasing $750 billion in U.S. energy over three years while investing an additional $600 billion in the American economy. That's $1.35 trillion in economic activity potentially caught in the crossfire of a Greenland dispute.

Whether cooler heads prevail or the EU actually pulls the trigger on its unused trade bazooka remains to be seen. But one thing's clear: the stakes just got considerably higher.