JANUARY 20 — The European Union today finds itself in an uncomfortable position.

It possesses economic power, legal instruments, and market size that should, in theory, allow it to respond decisively to President Donald Trump’s tariff threats linked to Greenland. Yet in practice, the European Union looks paralysed — armed with a bazooka it dares not fire.

Trump’s renewed tariff threats over Greenland are not really about trade. They are about power, coercion, and the open instrumentalisation of economic tools for geopolitical ends.

Tariffs are no longer deployed to correct trade imbalances or protect domestic industries. They have become blunt instruments to force political concessions — this time aimed squarely at Europe’s sovereignty and internal cohesion.

Greenland, formally part of the Kingdom of Denmark, has suddenly become the trigger point for a much larger transatlantic crisis.

The Arctic’s strategic value — its rare earths, new shipping routes, and military relevance — has transformed Greenland from a peripheral territory into a central object of great-power competition.

Trump’s logic is brutally simple: if the United States can coerce compliance through tariffs, why bother with diplomacy?

On paper, the European Union does have a powerful response.

The Anti-Coercion Instrument (ACI), adopted after years of debate, was designed precisely for moments like this. It allows the EU to retaliate against economic coercion by imposing counter-tariffs, restricting access to public procurement, limiting services, and even targeting financial flows.

In Brussels, this has been proudly described as Europe’s “economic bazooka”.

Yet the bazooka remains unused.

The reason is not legal weakness, but political fear. Triggering the ACI against the United States would mark an unprecedented escalation in transatlantic relations.

It would signal that the EU is prepared to treat Washington not as a strategic ally with disagreements, but as a coercive power subject to retaliation. Many European leaders are simply not ready for that psychological and political leap.

Europe’s hesitation also exposes a deeper structural problem.

The EU is an economic giant but a geopolitical dwarf. Its power rests on rules, procedures, and consensus.

Trump’s power rests on speed, unpredictability, and intimidation. These two logics do not meet on equal terms.

While Brussels debates proportionality, legality, and unity among 27 member states, Washington threatens, acts, and moves on. This asymmetry explains why Europe talks tough but acts softly.

Even those calling for firmness worry about retaliation spirals, market shocks, and damage to Nato cohesion. The irony is striking: Europe fears escalation even as escalation is already being imposed upon it.

There is also a credibility problem.

If the ACI is not used now — when tariffs are explicitly tied to political coercion — then when will it ever be used? A deterrent that is never activated ceases to be a deterrent.

It becomes a symbolic instrument, impressive on paper but hollow in practice. Europe risks teaching future coercers, whether allies or rivals, that economic pressure works because the EU will blink first.

From an Asian and Asean perspective, this moment is instructive.

Southeast Asian states have long understood the dangers of economic coercion by major powers. They know that legal instruments matter less than political resolve.

Europe’s dilemma mirrors what many smaller states face when confronted by stronger actors: possessing formal rules without the will to enforce them.

Trump’s tariff threats also signal a broader shift in the global order.

The post-Cold War assumption that allies do not coerce one another economically is collapsing. What we are witnessing is the normalisation of transactional power politics, even among supposed partners.

In such a world, economic interdependence no longer guarantees restraint; it becomes a weapon.

Europe must therefore make a hard choice.

Either it accepts that its strategic autonomy is rhetorical — useful for speeches but not for crises — or it demonstrates that economic coercion has real costs, even when it comes from Washington.

Firing the bazooka would be painful. Not firing it may be even more costly in the long run.

If Europe retreats now, Greenland will not be the last test. The precedent will be clear: tariffs work, pressure pays, and sovereignty is negotiable under economic duress.

That is a lesson other powers will absorb quickly.

The tragedy is not that Europe lacks tools. It is that it lacks conviction.

Until that changes, the EU will remain what it increasingly appears to be — an economic superpower with the instincts of a middle power, holding a bazooka it cannot bring itself to use.

* Phar Kim Beng, PhD is the Professor of Asean Studies at International Islamic University of Malaysia and Director of Institute of International and Asean Studies (IINTAS).

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.