DAVOS, Switzerland — U.S. Treasury Secretary Scott Bessent called for measured diplomacy on Tuesday amid escalating transatlantic tensions following the Trump administration’s controversial tariff threats targeting European nations. Speaking at the World Economic Forum annual meeting, Bessent characterized U.S.-European relations as exceptionally strong despite recent friction.
The diplomatic strain emerged after President Trump announced a 10% import tax scheduled for February implementation on goods from eight European countries. These nations had expressed solidarity with Denmark following Trump’s renewed assertions that the United States should acquire Greenland, a semi-autonomous Danish territory. The American administration has justified its position citing national security concerns regarding potential Chinese and Russian influence in the Arctic region.
European leaders have responded with outrage and intensified diplomatic consultations. The situation has prompted discussions of potential countermeasures, including retaliatory tariffs and the unprecedented deployment of the European Union’s Anti-Coercion Instrument. This mechanism, informally known as the ‘trade bazooka,’ enables the EU to sanction foreign entities attempting to exert undue pressure on member states.
The EU currently possesses three primary economic instruments to address the situation: imposition of new tariffs on American goods, suspension of portions of the U.S.-EU trade agreement, and activation of the comprehensive Anti-Coercion Instrument that targets specific individuals or institutions engaged in coercive practices.