The market fights by Zakir Hall

For years, Europe treated economic interdependence as a promise. Trade would make countries richer, investment would make them partners and supply chains would make conflict irrational. It was an attractive theory, and for a long time it looked like common sense. But interdependence has acquired a darker meaning. The same pipelines, markets, technologies and financial networks that bind countries together can also become instruments of coercion.

The European Union is finally learning this lesson. Its Anti-Coercion Instrument is not simply another item in Brussels’ expanding alphabet soup of regulations. It represents something more consequential: the beginning of a European doctrine of economic deterrence. The EU is discovering that its greatest strategic asset may not be an army but the sheer attractiveness of access to its market.

This is an uncomfortable transformation for a bloc that has traditionally preferred rules to retaliation. Europe likes to imagine itself as the continent of regulation, negotiation and multilateralism. Yet rules without the capacity to enforce them are merely polite suggestions. In an age when states increasingly use tariffs, trade restrictions, investment controls and economic dependencies as political weapons, politeness can become a strategic liability.

The Anti-Coercion Instrument changes the calculation. If another government attempts to bully the EU, or one of its members, through economic pressure, Brussels can contemplate a response extending beyond diplomatic complaints. Market access itself can become leverage.

That is the important shift. Europe is not suddenly becoming a mercantilist power. It is learning that economic power has to be usable power.

The distinction matters. The objective should not be to punish every unfriendly government or turn trade policy into permanent economic warfare. That would merely reproduce the coercive behaviour Europe claims to oppose. The instrument is most useful precisely when it remains credible but difficult to trigger. Deterrence works because the other side believes retaliation is possible, not because retaliation happens every Tuesday.

There is also a larger European paradox. The EU has spent decades integrating its economies while leaving many strategic dependencies inadequately diversified. Cheap energy, critical minerals, advanced technology and important industrial inputs were often treated primarily as commercial questions. Governments discovered too late that the cheapest supplier can become the most expensive strategic mistake.

The answer is not autarky. Europe cannot build a fortress economy around itself. Nor should it abandon global trade because authoritarian governments have learned how to manipulate it. The answer is resilience: diversified suppliers, stronger European production where strategically necessary, closer partnerships with democratic economies and institutions capable of responding collectively.

This is where the EU's enormous single market becomes more than an economic achievement. It becomes geopolitical infrastructure.

A country may ignore a European declaration. It is considerably harder to ignore access to hundreds of millions of consumers, sophisticated financial systems, industrial supply chains and a regulatory market that shapes commercial behaviour far beyond Europe's borders.

But Brussels should be careful. Economic weapons have recoil. Restrictions can hurt European companies, consumers and workers as well as foreign governments. Excessive use could encourage other powers to construct rival economic blocs, accelerating the fragmentation of global trade.

Europe therefore needs something it has often lacked in foreign economic policy: strategic discipline. The emerging lesson is simple. Interdependence is neither inherently peaceful nor inherently dangerous. It is power. Whoever controls the points of dependence possesses leverage.

For decades Europe possessed that leverage without quite understanding it. Now it is learning to use it. The real test will be whether Brussels can wield the weapon without becoming addicted to the fight.