The European Parliament is set to suspend approval of a key US trade deal, escalating transatlantic tensions over President Trump’s renewed push to acquire Greenland. The move has rattled global markets, reviving fears of a trade war.
The suspension will be announced Wednesday by the Parliament’s international trade committee. This directly responds to Trump’s weekend threat of new tariffs against Europe if it interferes with his efforts to purchase Greenland from Denmark, an EU member.
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Committee chair Bernd Lange stated there was “no alternative” but to halt the deal, accusing the U.S. of undermining stability by using tariffs as a “coercive instrument” against a member state’s sovereignty.
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Financial markets reacted immediately. Major U.S. stock indices fell sharply on Tuesday, with the S&P 500 dropping over 2%. European markets also declined for a second day. The price of gold, a safe-haven asset, rose above $4,800 an ounce for the first time.
The suspension jeopardizes the “Turnberry Deal” struck last July, which lowered U.S. tariffs on most European goods to 15%. The deal required European Parliament ratification to take effect. Its collapse could trigger a previously paused EU retaliation package worth €93 billion in tariffs on U.S. goods, which could take effect as early as February 7.
The standoff marks a dramatic deterioration in relations and places the vast EU-U.S. trade relationship, worth over €1.6 trillion annually, under severe strain.
