Paul Krugman argues that Trump's threats to impose escalating tariffs on European nations for refusing to hand over Greenland are based on a delusion of American economic leverage. He notes that tariffs primarily tax U.S. consumers, not foreign producers, with data showing foreigners absorbed only 4% of the cost in 2025.

The European economy is nearly as large as America's and isn't critically dependent on U.S. markets. Krugman points out that U.S. and European trade volumes are nearly balanced, with any asymmetry largely due to profit-shifting via Irish subsidiaries. Europe has also shown resolve by replacing U.S. support for Ukraine.

Europe possesses the tools to retaliate, including the EU's unified trade policy and its Anti-Coercion Instrument. This 'trade bazooka' provides a legal basis for swift sanctions against economic coercion. Krugman hopes Europe has learned from past timidity and will stand firm against Trump's bullying tactics.