Monday, January 19, 2026

Mixing Trade and Defense Policy: The E.U.-U.S. Bilateral Relationship

Trade and war have historically been related, as, for example, money from recurring surplus balances of trade—an alternative to debt—has facilitated military build-ups prior to going to war in the Europe. In threatening to take Greenland by military force if the E.U. state of Denmark continued to refuse to sell the island and then issuing 10% tariffs against Denmark and other E.U. states, as well as two sovereign European states for having sent troops to defend Greenland in case the U.S. were to invade, President Trump closely wielded trade and military policy. The E.U.’s response was unbalanced, being oriented only to the trade element of the E.U.-U.S. bilateral relationship, due to weaknesses in the E.U.’s federal system.

In January, 2026, President Trump’s announced that “a 10% tariff on all products coming from eight European countries”—the E.U. states of Denmark, Sweden, Finland, France, and Germany plus Britain, which had seceded from the E.U., and stand-alone Norway—would begin on February 1st and increase substantially months later “until a deal is reached for the ‘complete and total purchase of Greenland’.”[1] Those states had just sent troops to Greenland as doing so would prevent Trump from using military force to invade the island. The E.U. itself was inactive on this military front even though the independent coordination between a few states in sending troops lacked not only the united action, but also the political leverage that the E.U. could have provided in pushing back against Trump’s threats. That the E.U. is more than the sum of its parts (i.e., states) seems perpetually to be lost on Europeans, whose primary political instinct would be called “states’ rights” in American terms. In fact, the Euroskeptic ideology has gone so far as to misconceive of the E.U. itself as merely a trading “bloc,” such that adding competencies, or enumerated powers, in foreign policy and defense would by implication seem taboo.

Accordingly, rather than the European Commission, the Parliament, and the Council coordinating legislative and even “basic law” action to bolster the E.U.’s military reaction to Trump’s threats, calls were instead for the E.U. to “deploy its ultimate anti-coercion tool against the US . . .”[2] That instrument had been adopted by the E.U. in 2023 “to combat political blackmail through trade” and “would allow the E.U. to restrict third countries from participating in public procurement tenders. Limit trade licenses and shut off access to the single market.”[3] The use of the instrument would be in accord with the mistaken, ideologically convenient view that the E.U. is primarily a trade organization. Besides misconstruing the E.U.’s three pillars as exclusively economic in nature, the “geopolitical ramifications” of using the legislative instrument to “severely impact U.S. services and products” would be extrinsic. Furthermore, if those ramifications would cause the U.S. to militarily invade Greenland, the E.U. would have to rely on its states to respond militarily. I submit that such a military response would be suboptimal relative to a federal response.

President Trump’s geopolitical close linkage of trade policy and military strategy with respect to Greenland demonstrates just how deficient and costly the anti-federalist, Euroskeptic ideology has been with respect to the E.U. being thought of as primarily economic in nature. That the states sending troops to Greenland “reiterated their ‘full solidarity’” with the E.U. state of Denmark is not the same as a foreign-policy statement coming from the E.U.’s foreign minister. Even concerning the E.U.’s anti-coercion law, that the E.U. states of Germany and France were planning on pushing “their European partners to use all tools at their disposal” rather than work through the E.U.’s Council, which represents the states, demonstrates the anti-federalist, states’ rights ideology at work at the expense of federal action.[4] To be sure, it is difficult for governors of states to give up power to a federal level. The question is perhaps how deficient the E.U. must become in a changing world in which trade is increasingly intertwined with geopolitical and even military interests and activity before the E.U.’s state governments are willing to delegate enough competencies, or enumerated powers, to the Union in foreign policy and defense so the benefits of collective action can be realized. It is significant that, “across the pond” from the E.U., U.S. President Trump was happy to pit E.U. states against each other without any pushback with teeth from President Von der Leyen.



1. Maria Tadeo, “Pressure Grows on the E.U. to Deploy Trade Bazooka against Trump’s Greenland Tariff Threat,” Euronews.com, 18 January 2026.
2. Ibid.
3. Ibid.
4. Eleonora Vasques and Mared Gwyn Jones, “France and Germany Push to Use EU Anti-Coercion Tools If Trump’s New Tariffs Become Reality,” Euronews.com, 19 January, 2026.