EU Anti-Coercion Instrument — Regulation (EU) 2023/2675 enters into force

Mechanism

The Anti-Coercion Instrument (ACI) operationalises the EU's collective response to "third-country measures interfering in the legitimate sovereign choices of the Union or a Member State by applying or threatening to apply measures affecting trade or investment" (Art. 2(1), Reg. 2023/2675).

Procedural sequence (Arts. 4-8):

1. Examination phase. The Commission, on its own initiative or following information from a Member State, examines whether a third-country measure constitutes coercion and adopts an implementing decision identifying the coercing country. 2. Engagement phase. The Union seeks dialogue, mediation, cessation, and reparation. Response measures are explicitly a measure of last resort. 3. Response measures. Where coercion persists, the Council may, by qualified majority on a Commission proposal, authorise Union response measures from a calibrated menu: - tariffs / quotas / customs duties on goods of the coercing country; - restrictions on services trade; - restrictions on access to FDI by nationals or controlled entities of the coercing country; - restrictions on participation in EU public-procurement procedures; - restrictions on the protection of IP rights of nationals of the coercing country; - restrictions on access to the Union's banking, insurance, and capital-markets financial-services regimes.

Response measures must be proportionate to the coercion suffered and may target the coercing state's government, controlled entities, or beneficiaries of the coercion (Art. 11).

Origin and political context

The ACI was conceived in direct response to the PRC trade ban against Lithuania (2021-2022) following Vilnius's decision to permit a "Taiwanese Representative Office" (rather than "Chinese Taipei"). Beijing imposed unannounced customs blocks on Lithuanian exports and on EU-origin goods containing Lithuanian inputs, exposing the Union's lack of any explicit horizontal retaliatory framework. The Commission's original December 2021 proposal cited the Lithuania case alongside earlier unilateral coercion against Australia (2020-2021 PRC anti-dumping on Australian wine, barley, coal) as the trigger.

It is structurally novel — no other major trade jurisdiction (US, UK, Japan, Canada) currently operates a comparable horizontal anti-coercion framework, although the Japan Economic Security Promotion Act (2022) and the UK National Security and Investment Act (2021) address adjacent concerns from different angles.

Relationship to other EU defensive instruments

The ACI is the explicitly retaliatory leg of the post-2022 EU "open strategic autonomy" stack — distinct from the FSR (positive screening of inbound subsidies) and IPI (reciprocity in procurement-market access).

Downstream implications

• Provides procedural basis for any future EU retaliation against

PRC-style economic coercion targeting individual Member States or the Union as a whole, including hypothetical PRC measures against Member States that further upgrade Taiwan ties.

• Raises the EU's escalation ceiling vs. PRC compared to

pre-2024: any future cycle of MOFCOM countermeasures against EU CVDs (e.g., the Oct 2024 EU CVD on PRC BEVs) now has an explicit response mechanism if Beijing pivots from WTO-channel rebuttal to coercive countermeasures against individual Member States.

• Creates a model that may be replicated by other jurisdictions

(UK, Australia, Canada, Japan have all studied the ACI as a template).

• Signals to PRC that bilateral pressure tactics against

individual Member States will be treated as Union-level coercion warranting Union-level response — a structural deterrent.

Open questions

• Will the Commission ever formally invoke ACI examination, or

will the deterrence effect alone suffice? As of the latest available reporting (early 2026), no Art. 4 examination has been opened.

• Calibration of response measures — qualified-majority Council

voting may be slow in time-critical coercion scenarios; the WilmerHale analysis flags this as the principal procedural weakness.

• Interaction with WTO obligations: response measures

(especially services-trade and IPR restrictions) may face WTO-consistency challenges if invoked.