A senior European Union lawmaker has called for deploying a powerful new economic weapon, nicknamed the "trade bazooka," against the United States.
This dramatic statement came after the U.S. announced it would raise tariffs on European cars and trucks to 25%, a move that threatens to ignite a serious trade dispute. The "trade bazooka" is the informal name for the EU's Anti-Coercion Instrument (ACI). Adopted in late 2023, it's a legal framework designed to deter other countries from using economic pressure to influence EU policy. If diplomacy fails, the ACI allows the EU to impose a wide range of countermeasures, such as new tariffs, restrictions on services, or limits on investment. Its primary purpose is to be so powerful that it never has to be used.
So, what led to this flashpoint? The causal chain is quite clear. First, the immediate trigger was the U.S. announcement on May 1, 2026, to hike auto tariffs. This directly challenges the 2025 Turnberry Agreement, a transatlantic deal that set a 15% tariff ceiling. Second, tensions had been building for months. In February 2026, a U.S. Supreme Court decision weakened the legal basis for some American tariffs, creating uncertainty. In response, the European Parliament set firm conditions in March, linking any tariff reductions to U.S. compliance with existing agreements. This created a clear benchmark for what the EU would consider a violation.
The economic stakes are enormous. The EU and U.S. traded goods and services worth about €1.68 trillion in 2024. A 25% tariff on the €38.9 billion worth of cars the EU exports to the U.S. would impose nearly €10 billion in additional annual costs. This isn't just about the auto industry; it's a direct challenge to the entire framework of transatlantic trade.
Ultimately, the U.S. tariff threat has transformed the fragile Turnberry Agreement into a critical test case for the EU's credibility. The call to use the "trade bazooka" shows that Brussels is shifting its stance from negotiation to enforcement. The odds of the EU activating this powerful tool have risen sharply, making a swift, diplomatic de-escalation essential to avoid a costly trade war.
- Anti-Coercion Instrument (ACI): A legal tool that allows the EU to apply countermeasures, such as tariffs or service restrictions, against a non-EU country that is trying to pressure the EU or a member state into making a particular choice.
- Turnberry Agreement: A 2025 political agreement between the EU and the U.S. that aimed to de-escalate trade tensions, including setting a 15% cap on U.S. tariffs for certain EU goods.
- Tariff: A tax or duty imposed by a government on imported goods, making them more expensive for consumers and protecting domestic industries.