The EU may retaliate against Silicon Valley in response to Trump's tariffs, according to media reports.

The European Union is preparing to strike back at Silicon Valley should US President Donald Trump follow through on his threats to impose tariffs against the EU. This was reported by the Financial Times.

This will mark the first activation of Brussels' "bazooka," which could draw the services sector into the trade conflict.

The European Commission aims to utilize its "anti-coercion instrument" in a potential confrontation with Washington, allowing the EU to target US service sectors, particularly major tech companies.

This tool has already been employed as a deterrent against China. It permits EU authorities to impose restrictions on trade in services if they determine that a country is using tariffs on goods to coerce policy changes.

The application of the ACI will enable the EU to focus on large American tech firms (Big Tech).

One official commented to the publication that "all options are on the table," with the anti-coercion instrument highlighted as the strongest response possible without violating international law. It also allows the EU to block foreign direct investments or restrict market access for banking, insurance, and other financial companies.

As reported by the Judicial and Legal Newspaper, Donald Trump has imposed tariffs on imports from Canada, Mexico, and China. Now, importers will pay a new 25% tax on goods from Canada and Mexico, along with a 10% levy on products from China.

In response, Canada has imposed 25% tariffs on a wide range of American goods.

Additionally, the US will suspend tariffs on Mexican goods for one month. Mexico, in turn, will send 10,000 troops to the US border "to prevent drug trafficking."

Also, the US will suspend the introduction of import tariffs on goods from Canada for one month.