Germany and France, the EU’s economic heavyweights, are presenting a united front against Washington’s trade aggression. Their finance ministers declared in January 2026 that Europe “will not allow ourselves to be blackmailed.”

The joint stance centers on France’s proposal to activate the EU’s anti-coercion instrument against US tariff threats. Germany’s backing transforms what could have been a solo French grievance into a coordinated bloc-wide strategy.

What the EU is actually fighting

In July 2025, the EU and US struck a trade deal that imposed a 15% tariff on most EU exports heading to America and introduced quota systems on strategic products like steel and aluminum.

The Trump administration has since layered additional tariff threats on top of the existing framework, tying them to geopolitical demands including those related to Greenland.

German Finance Minister Lars Klingbeil and his French counterpart have spent recent months rallying support across EU member states for a collective response. The targets of US tariffs extend beyond steel and aluminum to include cars and other goods that form the backbone of European manufacturing, particularly in Germany.

The anti-coercion instrument they want to deploy was designed to let the bloc respond to economic pressure from third countries without waiting for WTO dispute processes. It requires demonstrating that a third country is using economic measures to interfere with sovereign policy choices.

Why France and Germany agreeing matters

Franco-German alignment on trade policy is not automatic. France tends toward protectionism. Germany, as Europe’s export champion, has traditionally favored open markets and gentle diplomacy with trading partners.

In 2025, Germany and France organized EU-wide support for potential responses to US tariffs on cars, steel, and other goods, building a coalition with broad backing among the 27 member states.

Linking tariff threats to Greenland, a territory under Danish sovereignty, crosses a line from trade disputes into geopolitical coercion — framing that makes it easier for the EU to justify deploying its anti-coercion instrument.

What this means for markets and investors

A 15% tariff on most EU exports already reshapes profit margins for European manufacturers selling into the American market. Additional retaliatory measures from the EU side would compound the damage in both directions.

Steel and aluminum producers sit at the center of the quota system established in the 2025 deal. Any expansion of retaliatory measures could tighten those quotas further or introduce new restrictions on American goods entering Europe.