WATCH: Besant says it would be ‘extremely unwise’ for Europe to retaliate against Trump’s threats over Greenland

BRUSSELS (AP) — White House threats over Greenland have sparked outrage and a flurry of diplomatic activity across Europe, as leaders consider potential countermeasures, including retaliatory tariffs and the first-ever use of the European Union’s anti-coercion tool.

US President Donald Trump said on Saturday that he would impose a 10% import tax starting in February on goods coming from eight European countries because of their opposition to US control of Greenland.

Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland will face the tariffs, Trump said in a social media post while at his golf club in West Palm Beach, Florida. He wrote on social media that the rate would rise to 25% on June 1 if an agreement was not reached on a “full and complete purchase of Greenland” by the United States.

European leaders from Dublin to Helsinki quickly condemned the announcement as economic coercion and sent representatives to Brussels on Sunday for an emergency meeting.

If diplomacy fails, they signal a new willingness to use the economic power of the 27-nation European Union.

European Commission spokesman Olof Gehl said on Monday: “Our priority is engagement, not escalation. Sometimes restraint is the most responsible form of leadership.” He added: “The European Union has tools at its disposal and is ready to respond in the event of the imposition of threatened tariffs.”

The value of trade between the European Union and the United States in goods and services will reach 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros per day, according to the European Union statistics agency Eurostat.

What’s next for the European Union?

Trump, European Commission President Ursula von der Leyen and other world leaders are now traveling to Davos to attend the annual World Economic Forum. No date has been set for meetings between European leaders and Trump.

After Davos, the 27 EU leaders will meet in Brussels on Thursday evening for an emergency meeting on transatlantic relations.

European Council President Antonio Costa said that EU leaders agreed that “tariffs would undermine transatlantic relations and run counter to the EU-US trade agreement.”

The leaders expressed their “readiness to defend ourselves against any form of coercion.”

US Treasury Secretary Scott Besent, speaking Monday to reporters in Davos, Switzerland, noted that EU officials were reaching out to the administration in the wake of Trump’s threat, saying “there are clearly a lot of arrivals.”

In response to a question about the possibility of the European bloc taking retaliatory measures, Besant said: “I think that would be very unwise.”

What options are on the table?

Benny Nass, senior vice president of the German Marshall Fund, a Washington-based think tank, said Europe has many tools at its disposal, but the road ahead is fraught with danger.

She added: “It is difficult for Europeans to find a space in which they can show their power without suffering significant retaliation. As long as they are not willing to accept retaliation, they will have difficulty showing power.”

The EU has three main economic tools it can use to pressure Washington: new tariffs, a suspension of the US-EU trade deal, and a “trade bazooka,” the informal term for the bloc’s anti-coercion tool that can impose sanctions on individuals or institutions found to be putting undue pressure on the EU.

The European Union and the United States agreed last June on a framework for a trade agreement. The European Parliament was scheduled to ratify it this week, but the leader of the largest group in parliament, center-right German MP Manfred Weber, said on Saturday that approval was “not possible at this stage.”

The EU could also impose tariffs on 93 billion euros ($108 billion) worth of US goods that it suspended after the July deal. However, Commission spokesman Gale said that unless this suspension is extended, these tariffs will come into effect on February 7 if the US continues with its tariff threat.

Irish Finance Minister Simon Harris warned of escalating tensions that could spoil the hard-fought deal.

“This is a time of calm minds,” he said before a meeting of European Union finance ministers in Brussels.

“We have worked hard at EU level to reach a trade agreement with the United States of America, a trade agreement that will ensure the continued flow of economic activity across the Atlantic, a trade agreement that is good for the United States, good for Europe, and good for Ireland. Anything that now moves away from that, or deviates from that, could have very serious consequences.”

Read more: The European Union and the Mercosur bloc sign a historic free trade agreement

Europe’s largest exports to the United States are medicines, automobiles, aircraft, chemicals, medical instruments, and wine and spirits.

In 2021, the European Commission created an anti-coercion instrument after Beijing restricted trade with Lithuania, which has established ties with Taiwan, which China claims as its own territory.

“The primary goal of ACI is deterrence. Therefore, the tool would be more successful if there was no need to use it,” a committee statement said.

There is widespread resistance to using the tool in European capitals for fear of escalating matters – but France and Germany, the bloc’s economic giants, have shown their support.

“Threats of tariffs are unacceptable and have no place in this context,” French President Emmanuel Macron said in a post on social media. He added, “The Europeans will respond in a unified and coordinated way if they are confirmed. We will ensure that European sovereignty is preserved.”

Indirectly, the European Union has sought to shift its economies from the United States to other parts of the world.

Brussels signed a huge trade agreement last week with the five Mercosur countries in South America, as well as separate agreements with Indonesia and Japan. EU officials are working on similar free trade agreements with the United Arab Emirates and India, with von der Leyen expected to finalize negotiations in late January.

Gill, the commission spokesman, said India’s deal would cover nearly two billion people and, along with Mercosur, provides a clear victory for the EU in the wake of the global economic chaos unleashed by the second Trump administration.

“We can see very clearly that the value of responsible and mature leadership on the global stage is paying off in terms of the EU’s trade agenda, and in terms of our efforts to diversify our trading partners and give ourselves the maximum economic potential from our partnerships around the world,” he said.

Associated Press writer Jamie Caten in Davos, Switzerland, contributed to this report.