In the escalating trade war with the United States, European officials are discussing imposing barriers on imports of U.S. services with a trade weapon that could allow the bloc to place restrictions on Big Tech and Wall Street.
“We have the power to push back,” Ursula von der Leyen, the European Commission president, said this week.
President Trump has already announced tariffs on aluminum, steel, cars and auto parts, moves that could seriously hobble the bloc’s shaky economy. Brussels has responded by announcing that it would reimpose levies on U.S. imports like Harley-Davidson motorcycles, whiskey and other goods, some of which were targeted during the trans-Atlantic clash Mr. Trump instigated in his first term.
To counter Mr. Trump’s latest reciprocal tariffs, European officials are weighing deploying a policy tool called the anti-coercion instrument, which some refer to as a “bazooka.” The instrument, which was adopted in 2023 to hit back at China but never used, is seen as a last resort option if talks with the Trump administration go south.
Brussels could adapt the tool to go after America’s tech giants and financial institutions. One outside plan that has been circulating in recent weeks includes a nuclear option: limiting American banks’ access to the E.U.’s enormous public procurement market, which would mean partly cutting off the banks from projects worth roughly 2 trillion euros ($2.2 trillion) each year.
Another idea in the preliminary plan is to target the huge sums that Europeans invest in American companies annually, a roughly €300 billion annual flow that has become a point of irritation for E.U. officials. And finally, the preliminary plan reads, Brussels “could also increase tax and regulatory pressure on American digital platforms.”
The plan didn’t make clear the scope, let alone how either proposal might be put in place. But it showed how broadly policymakers are thinking as the bloc weighs its approach.
“I personally think the big bazooka should be used first of all as a deterrent,” said Fabrizio Pagani, a partner at the investment bank Vitale and a former top economic official in the Italian government, referring to the anti-coercion tool. “So put it on the table, and let’s negotiate.”
Olof Gill, a European Commission spokesman, said that the anti-coercion instrument was being considered as Brussels plots its negotiating strategy. A point is that although the European Union has racked up a big trade surplus in goods, at the same time it has amassed a roughly €110 billion trade deficit in services with the United States. Exploiting that point could be a key in negotiations, advisers say.
But some analysts and economists worry that such hard-line negotiating could backfire.
“Tariffs on services, just like tariffs on goods, hit consumers and businesses directly,” said Joachim Klement, the head of strategy at the investment bank Panmure Liberum, adding that it would be a surefire way to escalate the trade war.
“You are just putting fuel on the stagflationary fire,” he added.