The 'nuclear button' the EU could use against the US economy: "It evokes massive destruction."

The tariff standoff between Europe and Donald Trump, which erupted in April, continues to generate tensions . The latest chapter has been the new postponement of the US ultimatum to August 1, accompanied by a threat to impose 30% tariffs on European products. However, this warning has not prevented some sectors from already being punished: steel, aluminum, and automobiles are in the crosshairs.

But in the midst of this tug-of-war, there is one resource the European Union has at its disposal: what is popularly known as a bazooka, and due to its high cost, it is also known as the "nuclear button." Brussels is keeping an "in extremis" solution up its sleeve to respond in the event of a failure in negotiations with Trump. This tool would serve as a deterrent against an opponent who apparently only knows the language of coercion.

"It's necessary to show strength," Danish Foreign Minister Lars Lokke Rasmussen declared in April. "If you want peace, you have to prepare for war, and I think that's where we are." A position shared by Ursula von der Leyen, President of the European Commission: "The EU has the power to strike back" at Trump.

European officials are already discussing this economic weapon, which could potentially target American technology and financial giants. However, for some actors, talking about it is fanning the flames of a trade war that could escalate dangerously . Olof Gill, spokesperson for the European Commission, confirmed that this Anti-Coercion Instrument (ICA)—the bazooka —is on the table while the negotiating strategy is being defined.

"Today's Europe is commercially dependent on China, energy-wise it's sold out to Russia and the United States, and is only now starting to mobilize in terms of defense," Fernando Cortiñas, a professor at IE Business School, told ABC. Looking at the numbers, the EU maintains a large trade surplus in goods with the US. That is, the EU earns more in goods by selling to the United States than by purchasing, but loses more in services because it runs a deficit of nearly €110 billion in services, where US dominance in technology, software, licensing, and finance is evident.

"Imports from the US represent approximately 13% of the European total. It's not a good idea to anger a partner that generates €165 billion in positive trade balance for Europe in goods ," explains Cortiñas. Therefore, the "nuclear button" would only be considered as a last resort. "It would be a Pyrrhic victory. What matters is negotiation. However, I would like to see, beyond the acronyms, a more concrete proposal from the EU that could intimidate the US," he adds.

This retaliation mechanism has been available since 2023. Initially designed to respond to China, it has never been activated and requires the approval of at least 15 of the 27 member states. The ACI contemplates a wide range of countermeasures: restrictions on trade in services, limitations on foreign direct investment, the application of customs duties, and fiscal and regulatory pressures on digital platforms. It would also contemplate limiting US banks' access to the vast EU public procurement market, which, according to The New York Times, would mean losing projects worth billions of euros each year.

Back in April, a tariff package on US products worth €21 billion was put on hold in order to prioritize negotiations and avoid a "war" that would be detrimental to both sides. However, in light of recent threats from Washington, Brussels is working on a retaliation plan worth more than €90 billion. If this avenue is exhausted, the dreaded "nuclear button" would come into play.

Maros Sefcovic, the European Commissioner for Trade and Economic Security, has noted that European ministers are showing greater willingness to react firmly if an agreed solution is not reached. However, when asked about its implementation, the response is that this option exists, but "we are not there yet," von der Leyen indicated . Ultimately, it is a stick that Brussels would prefer not to use.

But, as the NYT noted in a statement made to the newspaper by former EU trade official Ignacio García Bercero, if Trump follows through on his latest threat of a 30% tariff, it would push the European bloc firmly into the abyss and force it to react.

Cortiñas compares Trump's style to that of a used-car salesman playing poker with global trade policy: "He's disrupting the entire geopolitical order that emerged after World War II ." Europe, he adds, could well diversify its imports—especially in the energy and arms sectors—but until now it has paid a sort of "strategic toll " to maintain the U.S. as our big brother in defense.

" If Trump plays the bad guy, Europe will have no choice but to toughen things up as well. But we know we have more to lose. The US is already larger than the entire European economy combined and maintains a clear trade advantage. That's why Trump wants to impose tariffs: while this makes products more expensive and fuels inflation, it also increases US Treasury revenue," explains Cortiñas. "The result would be worse for everyone: the only ones who will gain more are the governments that will charge more in customs duties, but bilateral trade will decline, and Europe is more sensitive to this scenario."

Juan de Lucio Fernández, a certified professor at the University of Alcalá, clarifies to ABC that "we must be cautious about how we react to an irrational policy on the other side of the Atlantic. Europe must be consistent with its values, principles, and traditions. This does not imply naiveté: there are effective tools that are not equivalent to the 'nuclear button,' and which must be developed to be activated gradually, if necessary ."

Among these tools, he mentions geoblocking —preventing companies from operating if they can't guarantee that user information is registered in Europe and that don't comply with European data protection regulations— developing systems that aren't dependent on American payment systems , hindering investment outside the EU, and requiring European technological content in the manufacture of automobiles sold in the region. "These aren't all-or-nothing measures, like the idea of the 'nuclear option,' which evokes massive destruction, but rather calibrated tools."

For Cortiñas, talk of a "nuclear button" is, more than a real threat, part of the rhetoric aimed at containing Trump. "The problem is that while Trump acts and retracts swiftly, Europe is bureaucratic, rigid, and cannot reverse its decisions without causing diplomatic consequences. Europe pretends to be something Trump is not, and there are 27 voices, not one, and therefore it has to be much more careful with its tone."

The war in Ukraine also affects European strategy. "Although it's also true that Trump isn't interested in losing the option of paying for Ukraine's weapons with assets, mining operations, and a reconstruction of Ukraine that would be in the hands of European and US companies ," Cortiñas recalls. But he warns: "In any case, what Trump needs to know is that he can't pull the rope too far because it could break."