The European Union faced mounting pressure on Sunday to deploy its most powerful and never-before-used trade defense tool after U.S. President Donald Trump threatened sweeping tariffs on European allies in a bid to force the sale of Greenland, sharply escalating an already tense transatlantic dispute.

The situation is fast becoming a stress test of Europe’s economic sovereignty, alliance politics, and willingness to deploy hard trade power against its closest security partner.

Trump’s declaration on Saturday that he would impose escalating tariffs on a group of European countries until the United States is allowed to buy Greenland marked a sharp departure from conventional trade disputes. By explicitly linking punitive economic measures to a territorial demand involving a NATO ally, Washington has pushed the disagreement beyond commerce into the realm of strategic coercion, prompting alarm across European capitals.

At the heart of the EU’s deliberations is whether this moment warrants the first-ever use of the bloc’s Anti-Coercion Instrument, a legal framework designed precisely for situations where a third country seeks to force policy changes through economic pressure. Adopted after years of debate and shaped by earlier disputes with China, the tool was intended as a deterrent. Its possible activation against the United States underscores how dramatically transatlantic relations have shifted.

Diplomats say Sunday’s emergency meeting in Brussels, convened by Cyprus as holder of the EU’s rotating presidency, reflected both urgency and unease. While there is broad agreement that Trump’s approach crosses a line, consensus on how to respond remains elusive. Some governments argue that failure to react forcefully would weaken the EU’s credibility and invite further demands. Others fear that retaliation could spiral into a trade confrontation that Europe, given its export dependence, would struggle to contain.

France has emerged as a leading voice for a robust response. Officials close to President Emmanuel Macron argue that the Greenland episode strikes at the core of European autonomy, not only in trade but in foreign policy. In Paris, the concern is that allowing tariffs to be used as leverage over territorial or security issues would normalize a practice that could later be turned inward against EU decision-making on defense, technology, or industrial policy.

Germany’s industrial lobby has reinforced that view, framing the dispute as a precedent-setting moment. Export-oriented manufacturers, already under pressure from weak global demand and lingering trade barriers, warn that acquiescence would expose European companies to chronic uncertainty. Business leaders stress that the issue is no longer about tariff levels but about whether economic rules can be bent to serve unrelated political goals.

Yet divisions within Europe are real. Italy’s more cautious stance reflects a broader calculation shared by some southern and eastern member states: that keeping channels open to Washington, even in a crisis, may yield better long-term outcomes than immediate retaliation. Prime Minister Giorgia Meloni’s direct call with Trump highlights an alternative strategy centered on personal diplomacy and de-escalation, though its effectiveness remains uncertain.

Britain’s position adds another layer of challenge. While no longer an EU member, London is directly targeted by the tariff threat and has its own limited trade deal with Washington at stake. UK officials have signaled reluctance to escalate, mindful of their dependence on the U.S. relationship in trade, security, and intelligence. That restraint, however, risks leaving Britain isolated if the EU chooses a harder line.

The economic implications are potentially significant. Trump’s threat calls into question the viability of the trade agreements struck last year with both the EU and Britain, deals that were already politically fragile. In Brussels, there is growing skepticism that the European Parliament can proceed with planned tariff reductions for U.S. goods while Washington is openly threatening new duties. Suspending or shelving the agreement would deal a blow to efforts to stabilize transatlantic trade ties after years of friction.

Beyond immediate trade flows, the dispute feeds into a larger debate about Europe’s place in a more transactional global order. The Anti-Coercion Instrument was conceived as part of a broader strategy to equip the EU with tools comparable to those wielded by major powers. Using it against the United States would be a dramatic statement that Europe is prepared to defend its interests regardless of the partner involved, but it would also mark a psychological break in the post-war assumption that transatlantic disputes can always be managed quietly.

The timing has sharpened the contrast in Europe’s external strategy. As Trump’s tariff threat reverberated, the EU was finalizing its free trade agreement with Mercosur, its largest ever. European Commission President Ursula von der Leyen has framed that deal as evidence that Europe remains committed to open, rules-based trade even as others turn to tariffs and pressure. For some policymakers, that makes standing firm against Washington all the more important to preserve the EU’s credibility on the global stage.

However, the bloc is trying to balance deterrence and diplomacy for now. EU officials say no decision has been taken on activating the Anti-Coercion Instrument, but the fact that it is being openly discussed signals how seriously the threat is being taken.

It is not clear whether Europe will ultimately choose retaliation or restraint. What is clear is that the Greenland dispute has already altered the tone of transatlantic relations, exposing fault lines that extend far beyond tariffs and into the future shape of the alliance itself.

President Donald Trump has sharply raised the stakes in his long-running push to acquire Greenland, vowing to impose a rolling wave of tariffs on key European allies until the United States is allowed to buy the Arctic island, a move that has alarmed European capitals and injected new tension into transatlantic relations.

In a post on his Truth Social platform on Saturday, Trump said the United States would slap an additional 10% import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and Great Britain. Those levies, which would be applied on top of existing tariffs, would rise to 25% by June 1 and remain in place until Washington secures a deal to purchase Greenland.

Trump framed the move as a response to what he called a “dangerous game” being played by European governments.

“These Countries … have put a level of risk in play that is not tenable or sustainable,” he wrote, without elaborating on the specific actions that prompted the warning.

Greenland, an autonomous territory within the Kingdom of Denmark, has repeatedly rejected the idea of being sold. Danish officials and Greenland’s leadership have insisted the territory is not for sale and that its future should be determined by its own people. Public opinion in the United States also appears lukewarm. A Reuters/Ipsos poll conducted this week found that fewer than one in five Americans support the idea of acquiring Greenland.

Trump’s threat immediately triggered pushback across Europe. Denmark’s Foreign Minister Lars Lokke Rasmussen said the announcement was unexpected and reiterated Copenhagen’s position that trade measures should not be linked to Greenland. British Prime Minister Keir Starmer took the unusually direct step of condemning the move publicly, writing on X that applying tariffs on allies acting within NATO’s collective security framework was “completely wrong” and promising to raise the issue directly with Washington.

European Commission President Ursula von der Leyen and European Council President Antonio Costa said the European Union stood in “full solidarity” with Denmark and Greenland, warning that tariffs would damage transatlantic ties and risk a downward spiral in relations. Norway, Sweden, France, and Germany echoed those sentiments, while Cyprus, which currently holds the EU presidency, called an emergency meeting of ambassadors from the bloc’s 27 member states.

Protests also broke out in Denmark and Greenland on Saturday, with demonstrators calling for the territory’s right to determine its own future and rejecting Trump’s demands.

The confrontation threatens to unravel tentative trade arrangements reached last year between the United States, the European Union, and Great Britain, which set baseline tariffs of 15% on most European imports and 10% on British goods. William Reinsch, a trade expert at the Center for Strategic and International Studies, warned that singling out specific EU countries could harden opposition within Europe.

“It may well convince the European Parliament that it is pointless to approve the trade agreement with the U.S., since Trump is already bypassing it,” he said.

Trump has not cited a clear legal basis for linking tariffs to the Greenland issue, but the tactic fits a broader pattern. Tariffs have become a central tool in his foreign policy, used to pressure both allies and adversaries. This week, he said he would impose 25% tariffs on any country trading with Iran over Tehran’s crackdown on protests, even though no formal policy documentation has yet appeared on the White House website. The U.S. Supreme Court has already heard arguments on the legality of Trump’s sweeping use of tariffs, a case that could have wide implications for presidential authority and global trade.

At the heart of the dispute lies Greenland’s strategic value, which Trump has repeatedly highlighted. The island occupies a critical position between North America and Europe, straddling key air and sea routes in the North Atlantic and Arctic. As melting ice opens new shipping lanes and access to previously unreachable resources, Greenland has become more central to global competition in the far north.

The territory is rich in minerals considered essential for modern technologies, including rare earth elements used in electric vehicles, wind turbines, and advanced electronics. Reducing reliance on China for these materials has become a priority for Washington, and Greenland’s deposits are seen as a potential alternative source.

There are also security considerations. Greenland hosts the Pituffik Space Base, formerly known as Thule Air Base, a cornerstone of U.S. missile warning and space surveillance systems. About 200 U.S. personnel are already stationed there, and a 1951 agreement with Denmark allows Washington to deploy additional forces as it sees fit. The island is also covered by NATO’s collective defense pact, a point European officials have stressed in rebutting Trump’s claims that U.S. ownership is necessary for security.

Trump has argued that growing activity by China and Russia in the Arctic makes Greenland indispensable to American defense. European leaders counter that existing NATO arrangements already address those concerns. EU foreign policy chief Kaja Kallas warned that the dispute risks benefiting Washington’s rivals.

“China and Russia must be having a field day. They are the ones who benefit from divisions among allies,” she said on X.

Even within the United States, the president’s approach has drawn concern. Senators Jeanne Shaheen and Thom Tillis, bipartisan co-chairs of the Senate NATO Observer Group, said in a joint statement that pressing allies through tariffs over Greenland was “bad for America, bad for American businesses and bad for America’s allies.”

Some analysts urged restraint. Carsten Brzeski, global head of macro at ING Research, said Europe should avoid rushing into countermeasures.

“Just ignore it and wait and see,” he told Reuters, arguing that past experience suggested Trump’s threats do not always translate into sustained policy.

Greenland, once a remote geopolitical afterthought, has become a flashpoint in global politics. What began as an unconventional idea has evolved into a serious diplomatic rift, with trade, security, and alliance cohesion all now tied to the future of a vast Arctic island that insists it does not want to be bought.