Mitigate, deter, escalate: Europe’s options against US economic coercion

Summary — “Mitigate, deter, escalate: Europe’s options against US economic coercion” (ECFR, Agathe Demarais, Tobias Gehrke & José Ignacio Torreblanca, 11 June 2026)

This policy brief builds three forward-looking scenarios (autumn 2026 onward) of how the Trump administration could escalate economic coercion against Europe once tariffs hit their limits — in currency, energy and technology. In the currency scenario, Washington pushes a “Mar-a-Lago Accord” forcing foreign Treasury holders (the EU holds ~$2trn) to sell dollars, later threatening IEEPA-based conversion into zero-coupon century bonds and mandating dollar-stablecoin dominance; the EU responds by stalling, forming a silent “flow-denial” coalition with Japan/UK/Canada refusing new Treasury purchases, and using MiCA to force stablecoin issuers to custody reserves in the EU (Euroclear/Clearstream). In the energy scenario, the US leverages the Turnberry LNG pledge and “Energy Dominance” doctrine to demand $600bn in EU investment in US energy infrastructure; the EU mitigates via AggregateEU purchases, then builds a deterrence coalition highlighting European firms’ (ASML, Nokia, Siemens Energy, Infineon) indispensability to the US AI/data-centre buildout, and ultimately threatens tariffs and an Anti-Coercion Instrument (ACI) investigation. In the technology scenario, Trump threatens to cut cloud/semiconductor access and sanction EU officials over DSA/DMA enforcement against Google, Meta, X and OpenAI; the EU escalates through the ACI, Democracy Shield, emergency TFEU powers, and personal sanctions/travel bans, eventually forcing US climbdowns (“TACO” — Trump Always Chickens Out). Three cross-cutting lessons emerge: act on flows rather than stocks, rely on US financial markets and industry to pressure Trump internally, and use each crisis to build durable European regulatory/industrial infrastructure (e.g., the €300bn technological sovereignty strategy).

The US under Trump will seek new ways to coerce Europe economically. Here is how Europeans can resist the pressure and emerge stronger for it.

Source: ECFR Publications · June 11, 2026