France Backs Using EU’s Top Trade Tool Against US If Needed

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France wants the European Union to consider deploying its most powerful retaliatory measure against the U.S. for the first time ever if President Donald Trump uses tariffs to unfairly force the bloc into policy changes.

France has joined a small group of EU countries that believes the so-called anti-coercion instrument — a tool designed to strike back against nations that use trade and economic measures coercively — should be on the table, according to people familiar with the matter, even if it isn’t the preferred course of action, one of them said.

The U.S. plans to impose sweeping tariffs on global partners as soon as April 2. Trump has said the duties will rectify non-tariff barriers that he says are unfair, such as domestic regulations and how countries collect taxes, including the EU’s value-added tax. The EU says its VAT is a fair, non-discriminatory tax that applies equally to domestic and imported goods.

The anti-coercion instrument, which is subject to a number of conditions and steps, would eventually allow the EU to deploy a broad range of retaliatory responses, including restrictions on trade and services as well as certain intellectual property rights, foreign direct investment and access to public procurement.

The euro briefly fell below 1.08 against the dollar for the first time in two weeks while German bonds edged higher to leave the 10-year yield two basis points lower at 2.76%.

(Bloomberg)

Trump escalated a global trade war this month by imposing a 25% tariff on steel and aluminum imports, which led the EU to announce its own retaliatory duties on