Overview

• The Anti-Coercion Instrument, created in late 2023 and unused to date, authorizes measures from quotas and licensing curbs to procurement exclusions and foreign direct investment restrictions
• Germany, France, Spain and other member states are prepared to invoke the ACI to target U.S. services exports if a deal is not reached
• The European Commission is pursuing a baseline agreement that would cap U.S. duties at 10% and protect sectors such as autos, agriculture and aerospace through exemptions
• Under EU rules invoking the ACI can take up to a year but the commission can expedite investigation, member approval and implementation ahead of the August 1 trigger
• President Trump has threatened to impose 30% tariffs on EU imports starting August 1 if talks fail to avert higher duties