On Saturday, US President Trump announced he would impose 10 per cent tariffs on eight European countries, including the UK, who oppose US plans to acquire Greenland. Tariffs will increase to 25 per cent by 1 June if a deal is not made for the US to make a ‘complete and total purchase of Greenland’.
This move confirms we are now in an era of major powers engaging in increasingly blatant economic coercion. Exploiting economic leverage for geopolitical purposes is not new – sanctions, tariffs and embargoes all have a long history. But the growing willingness of both the US and China to jettison trade norms and impose tariffs or pinch economic chokepoints to achieve geopolitical ends, has intensified the risks for other economies.
This new era is difficult for the UK, an open economy highly integrated into global trade and traditionally dependent on predictable, rules-based commerce. Leaving the European Union means it is no longer part of a trade bloc with the broader economic heft (if not always the unity or effectiveness) to directly counter tariffs and other forms of economic pressure. While some of Trump’s plans could still be contained by a deal on Greenland or domestic opposition, the wider risks of economic coercion mean the UK should put tools and plans in place to prepare for worst-case scenarios.
What the Greenland tariffs tell us
Trump’s tariff announcement undermines the idea that his administration’s approach to tariffs is part of a coherent policy to rebalance US trade or onshore critical industries from overseas. Nor does it fit into a wider policy of seeking to align allies in creating economic barriers to Chinese dominance of critical technologies and supply chains.
There may be voices in the Trump administration who want such measures directed towards containing China or bolstering strategic domestic industries, but for now, the president appears to have slipped their control. The Greenland tariffs are simply a way of punishing allies economically for denying the US administration something it wants.
This suggests UK tactics for managing US tariff threats to date, such as giving assurances as part of the 2025 US–UK Economic Prosperity Deal that it would ensure ‘supply chain security’ and align with the US to ‘address non-market policies of third countries’ – widely viewed as targeted at China – will not be enough. Trump’s demands are increasingly not about China, but about acquisition of territory in the Western Hemisphere or other goals.
It is important to note that Trump’s tariff announcement is a social media post, not a binding policy. While it suggests that US foreign policy is increasingly subject to his whims, the directive could still be curtailed. The US Supreme Court may yet say Trump cannot use emergency powers to unilaterally impose tariffs, as he has done so far.
But the US is not the only powerful global actor weaponizing economic ties. China increasingly dominates global supplies of critical raw materials and technologies. It has throttled these supplies or disrupted trade relations in disputes with Lithuania, Australia, Canada and South Korea in the past decade, and has restricted exports of rare earths in the past year, hitting US and EU markets. The EU’s Anti-Coercion Instrument (ACI), which enables the bloc to jointly respond if a member state is targeted with punitive economic measures, was created at least partly to manage risks of Chinese economic aggression. France’s President Macron has now requested it is invoked over the Greenland tariffs.
What the UK can do
While the UK has taken some significant steps to arm itself for this new era of geo-economic bullying, it could do more.
A first step for the UK would be to establish a robust framework for anti-coercion. The EU’s ACI is a useful example – even though the UK is a single country and does not require a collective trade defence mechanism intended for a bloc. The ACI broadly defines economic coercion and sets out a range of countermeasures the EU could use, going beyond traditional trade responses to include diplomatic negotiation, investment restrictions and exclusion from EU procurement. So, while a legislated anti-coercion instrument may not be necessary for the UK, a policy framework for identifying coercion, setting thresholds for action and identifying potential sources of UK leverage now looks critical.
But a more contemporary framework for trade defence does not imply hasty retaliation. Effective anti-coercion also involves working with others to uphold the remaining structures of the global trade order, prevent escalation where possible and manage the risks of supply chain disruption. An important such step was the UK’s 2025 trade strategy commitment to join the WTO’s alternative appeals process, the Multi-Party Interim Arbitration Agreement, amid a US boycott of the established appeals court, indicating the UK’s ongoing support for multilateral trade dispute mechanisms.
Beyond trade, the UK could also go further to protect national assets from undue foreign influence. The government has already introduced legal powers (via the 2021National Security and Investment Act) to block foreign actors from investing in 17 strategic sectors and has become more adept at assessing foreign investment risks. But some gaps remain. The law works by enabling the relevant minister to request a review of a given transaction, but this means some investments – especially ‘greenfield’ investments that create new entities rather than acquire existing ones – can evade scrutiny. Stronger coordination on investment risks and foreign influence is required across government, the private sector, and international partners – especially those with which the UK has strong industrial ties, such as the EU.