NextFin News - In a significant escalation of transatlantic trade tensions, France has formally asserted that the European Union possesses the necessary arsenal to neutralize the impact of U.S. President Trump's latest protectionist measures. Speaking to the Financial Times on Saturday, February 21, 2026, French Trade Minister Nicolas Forissier confirmed that Paris is coordinating with the European Commission and EU member states to finalize a robust retaliatory framework. This move follows U.S. President Trump's decision to impose a flat 10% global tariff, a policy shift triggered after the U.S. Supreme Court recently invalidated several of his administration's previous targeted levies as unconstitutional executive overreach.
The French government’s stance marks a pivotal moment in EU-U.S. relations, as Forissier emphasized that "should it become necessary, the EU has the appropriate instruments at its disposal." Central to this strategy is the Anti-Coercion Instrument (ACI), colloquially known in Brussels as the 'trade bazooka.' According to Forissier, the ACI grants the bloc sweeping powers to impose export controls, levy tariffs on services, and exclude U.S. companies from lucrative EU procurement contracts. Furthermore, officials in Paris indicated that a suspended package of retaliatory tariffs covering more than €90 billion ($106 billion) of U.S. goods is ready for immediate activation if the 10% global tariff is implemented.
The current friction is rooted in a complex legal and political landscape. After the U.S. Supreme Court struck down the administration's prior tariff regime, U.S. President Trump pivoted to a broader 10% universal duty to maintain his 'America First' economic agenda. This has effectively rendered the Turnberry framework agreement of July 2025—which sought a 'reciprocal and fair' trade balance—politically obsolete. The European Parliament had already signaled its discontent by suspending the ratification of that agreement in January 2026, citing the administration's unpredictable trade maneuvers as a breach of trust. Forissier’s comments suggest that the EU is no longer willing to negotiate from a position of perceived weakness, instead opting for a doctrine of 'strategic deterrence.'
From an analytical perspective, the EU's reliance on the ACI represents a shift toward 'geoeconomic realism.' Unlike traditional WTO-compliant retaliatory measures, which often take years to adjudicate, the ACI is designed for agility. By targeting U.S. technology giants and service sectors, the EU is aiming at the most sensitive nerves of the American economy. Data from the European Central Bank suggests that previous U.S. tariffs reduced European growth by approximately 0.2 percentage points in 2025; however, a coordinated counter-strike using the ACI could impose a symmetrical or even greater cost on U.S. GDP, particularly in the high-growth digital and financial services sectors.
The impact of this confrontation extends beyond mere trade figures. The 'trade bazooka' is not just a set of duties; it is a statement of European sovereignty. By threatening to bar U.S. firms from public procurement, the EU is leveraging its status as the world's largest single market—a market of nearly 500 million consumers. Forissier and his counterparts are betting that the threat of losing access to this market will force a recalibration in Washington. However, the risk of a 'negative-sum' trade war remains high. As value chains are deeply integrated, particularly in the automotive and chemical industries, a 10% U.S. tariff coupled with EU retaliation could shave up to 0.5% off medium-term global growth projections.
Looking forward, the trend suggests a fragmentation of the multilateral trading system. With the WTO's Appellate Body remaining paralyzed, the EU is increasingly forced to act as a 'sovereign regulator' rather than a 'multilateral partner.' The coming months will likely see a period of intense 'shuttle diplomacy' between Brussels and Washington, but the baseline has changed. The EU, led by the vocal advocacy of France, has demonstrated that it will no longer accept unilateral trade dictates. Whether this leads to a new, more stable trade equilibrium or a full-scale economic decoupling will depend on the U.S. administration's willingness to recognize the EU's 'trade bazooka' as a credible threat to American corporate interests.
Explore more exclusive insights at nextfin.ai.
