The European Commission has raised the prospect of a trade war with the United Kingdom, promising to retaliate with "all measures at its disposal" if Liz Truss goes forward with her plan to alter the Northern Ireland protocol.

On Tuesday, the foreign secretary announced intentions to introduce legislation to amend the protocol, including the elimination of all inspections on goods traveling from the United Kingdom to Northern Ireland that are not headed for the Republic of Ireland.

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Truss stated that the UK still had hopes of achieving an agreement with the EU and claimed it worked "tirelessly" to do so.

According to Truss, the current protocol threatens the Belfast agreement, referring to it as "under strain."

“To respond to the very grave and serious situation in Northern Ireland we are clear that there is a necessity to act to ensure the institutions can be restored as soon as possible,” Truss stated.

Part of the government's purpose is to appease the Democratic Unionist Party, which has refused to form a power-sharing administration with leading party Sinn Féin at Stormont unless the protocol is changed.

Truss' comment, according to the DUP's Westminster leader, is “a welcome if overdue step that is a significant move towards addressing the problems created by the protocol, and getting power-sharing, based upon a cross-community consensus, up and running again.”

His party would want to see legislation proceed “in days and weeks, not months,” he added.

Meanwhile, former Taoiseach Leo Varadkar, a protocol co-architect, told a Co-operation Ireland business event in Dublin that the move was "breeding mistrust in EU capitals."

Truss demanded that Maro Sefcovic, the EU's senior official in charge of UK relations, be given a new negotiating mandate that would allow the convention to be altered. However, in response to Truss's comments, Sefcovic issued a veiled warning that the UK may lose its position.

Contradicting an international agreement

Sefcovic, a European Commission vice-president in charge of protocol negotiations, said Truss' suggestions posed “significant concerns”, adding: “Unilateral actions contradicting an international agreement are not acceptable.”

In a statement, he said, “Should the UK decide to move ahead with a bill disapplying constitutive elements of the protocol as announced today by the UK government, the EU will need to respond with all measures at its disposal."

According to Catherine Barnard, an EU law scholar at the University of Cambridge, the EU may slap UK products with tariffs within seven days of legal action or freeze the whole trade pact signed with Boris Johnson in 2020, two of three immediate weapons at its disposal.

Legal action against the UK, which was suspended as a goodwill gesture last year, would very certainly be resumed.

Truss said the new law will be published within weeks, and that it would include proposals to establish a "green channel" that would enable products to be exported from the United Kingdom to Northern Ireland without being checked as long as they were not bound for the Republic of Ireland.

The law would also allow the United Kingdom to control taxation and expenditure in Northern Ireland. Truss cited the chancellor's recent decision to reduce VAT on green energy projects, which she said he could not execute in Northern Ireland.

According to Brussels sources, no decisions on how to respond if Truss does pass the legislation, and the EU hopes the UK would return to the bargaining table to address modifications presented by the EU. If the government introduces the legislation, it was envisaged that Brussels would issue a formal warning and initiate a process to decide on punitive actions.

EU officials think the UK never truly considered Sefcovic's far-reaching suggestions to reduce customs and administrative procedures last October.

Truss, though, dismissed these issues in the Commons. "Their current proposals are not able to address the fundamental concerns. In fact, it is our assessment that they would go backward from the situation we have today with the standstill," she added.

According to EU officials, a change in mandate would require unanimous approval from all member states. They stated that there was no inclination to amend Sefcovic's mission in order to allow for broad modifications to the protocol, which Truss regarded as a "fundamental issue." The senior EU ambassador shot down this notion, adding, “The EU doesn’t have a mandate, the protocol is the mandate."