| Journalism has many rules: be accurate; be balanced; protect your sources. Donald Trump, however, has apparently prompted EU hacks to endorse yet another edict: never – ever – write about the US president’s tariffs without mentioning Brussels’ “trade bazooka”. This propensity has dramatically intensified since last Saturday, when Trump threatened to hike the baseline US levy on European exports from 10% to 30% from 1 August. Indeed, reporters – many of whom appear to have spent their youths overindulging in explosion-filled Arnold Schwarzenegger films – now seem incapable of writing about US trade policy without mentioning the likely imminent activation of the “anti-coercion instrument”, or “ACI”. (Full disclosure: I’ve also written about the ACI, and I also love Arnie.) Typically, journalists are careful to couch their language in such a way as to ensure their claims are almost tautologically true: the Financial Times, for instance, recently claimed that the “bazooka’ tool [is] being considered” by Brussels – an assertion that would, strictly speaking, be correct if Björn Seibert fleetingly pondered its use while tying his Asics sneakers. Other, similarly vacuous ways of describing Brussels’ attitude towards the ACI include “floats” and “mulls” (Bloomberg); the clunkier “looking to use” (also the FT); and the hilariously incorrect “agonises over” (Politico). (Arguably, the image of vapid Eurocrats “agonising over” whether or not to fire a bazooka is reminiscent of George Carlin’s joke about the inventor of flamethrowers: “Gee, I’d sure like to set those people on fire over there – but I’m way too far away to get the job done.”) Jokes aside, there are three key questions for us to, er, consider. First, what is the ACI? Second, will it be used? And third, should it be? Ironically, the ACI was actually conceived as a direct result of Trump’s policies during his first term. In particular, the US withdrawal from the Iran nuclear deal in 2018 prompted EU officials to develop an instrument that would protect the bloc from US “secondary sanctions”, which Washington threatened against firms and countries that continued to trade with Tehran. The efforts were subsequently turbocharged by China’s imposition of export controls on strategically critical minerals on Lithuania in 2021, after the Baltic nation upgraded diplomatic ties with Taiwan, a self-governing island whose independence Beijing refuses to recognise. According to experts, the instrument, which came into force in 2023 but has never actually been used, is undoubtedly Brussels’ most powerful – and versatile – trade weapon. “The term ‘bazooka’ is trendy in Brussels, but it’s also pretty accurate,” said Tobias Gehrke, a senior policy fellow at the European Council on Foreign Relations. “The range of potential responses is unrivalled: hypothetically, you can do a lot of damage.” This potential damage includes imposing investment restrictions, withdrawing intellectual property protections, suspending individual companies’ licences, banning access to EU public procurement markets, and sanctions targeting specific individuals, he said. Crucially, the ACI can legally empower the European Commission, which oversees EU trade policy, to impose countermeasures targeting not just a “coercing” nation’s goods but also its services. This is important for two reasons. First, because the EU, which has already threatened to slap retaliatory levies on €93 billion worth of US goods, is now running out of goods to target. Second, because unlike trade in goods, the bloc runs a substantial deficit in services with the US – thus in theory giving it “escalation dominance” over Washington in this area. Thus, it would seem that the ACI could be the perfect tonic for Brussels’ transatlantic malaise: at a time when Trump is continuing to escalate his tariff threats, a bazooka blast might be just what the trade doctor ordered.
Trigger-happy journalism
Unfortunately - and unlike with an actual bazooka - there are numerous practical, political, and strategic obstacles standing in the way of the ACI's use. | 