European Union ambassadors reached broad agreement on Sunday to intensify efforts to dissuade U.S. President Donald Trump from imposing tariffs on European allies, while also preparing retaliatory measures should the duties go ahead, EU diplomats said.

Trump vowed on Saturday to implement a wave of increasing tariffs from February 1 on EU members Denmark, Sweden, France, Germany, the Netherlands and Finland, along with Britain and Norway, until the U.S. is allowed to buy Greenland, a step major EU states decried as blackmail.

EU leaders are set to discuss options at an emergency summit in Brussels on Thursday. One option is a package of tariffs on 93 billion euros ($107.7 billion) of U.S. imports that could automatically kick in on February 6 after a six-month suspension.

The other is the so far never used "Anti-Coercion Instrument" (ACI), which could limit access to public tenders, investments or banking activity or restrict trade in services, in which the U.S. has a surplus with the bloc, including in digital services.

The tariff package appeared to command broader support as a first response than anti-coercion measures, where the picture was currently "very mixed", according to an EU source.

DIALOGUE IN DAVOS

European Council President Antonio Costa, who chairs EU summits, said in a social media post that his consultations with EU members had shown their strong commitment to support Denmark and Greenland and readiness to defend against any form of coercion.

Danish Foreign Minister Lars Lokke Rasmussen, visiting his Norwegian counterpart in Oslo, said Denmark would continue to focus on diplomacy, referring to an agreement Denmark, Greenland and the U.S. made on Wednesday to set up a working group.

"The U.S. is also more than the U.S. president. I've just been there. There are also checks and balances in American society," he added.

The EU's efforts at dialogue are likely to be a key theme of the World Economic Forum in Davos, where Trump is set to deliver a keynote address on Wednesday in his first appearance at the event in six years.

"All options on the table, talks in Davos with the U.S. and leaders gather after that," said one EU diplomat in summarising the EU's plan.

The eight targeted countries, already subject to U.S. tariffs of 10% and 15%, have sent small numbers of military personnel to Greenland, as a row with the United States over the future of Denmark's vast Arctic island escalates.

"Tariff threats undermine transatlantic relations and risk a dangerous downward spiral," they said in a joint statement published on Sunday, adding they were ready to engage in dialogue, based on principles of sovereignty and territorial integrity.

Danish Prime Minister Mette Frederiksen said in a written statement she was heartened by the consistent messages from the rest of the continent, adding: "Europe will not be blackmailed".

The tariff threat unsettled global markets, with the euro and sterling falling against the dollar and a return to volatility expected.

Source: Reuters

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