The European Parliament has suspended its approval process for a major trade agreement with the United States, escalating transatlantic tensions after President Donald Trump renewed calls for the U.S. to take control of Greenland.
The suspension was announced in Strasbourg on Wednesday as Trump addressed the World Economic Forum in Davos. Lawmakers said the decision followed fresh trade uncertainty triggered by Trump’s remarks on Greenland, which unsettled financial markets and revived fears of a renewed trade confrontation between Washington and Brussels.
The agreement, reached in July at Trump’s Turnberry golf course in Scotland, had lowered U.S. tariffs on most European goods to 15% from an initially threatened 30% under Trump’s ‘Liberation Day’ tariff drive in April.
In return, the European Union had committed to increased investment in the United States and policy changes aimed at supporting U.S. exports. The deal still required ratification by the European Parliament to enter into force.
Bernd Lange, chair of the European Parliament’s International Trade Committee, said lawmakers were “left with no alternative but to suspend work on the two Turnberry legislative proposals,” adding that implementation would remain on hold until the United States re-engaged “on a path of cooperation rather than confrontation.”
The move reopened the possibility that the EU could activate retaliatory tariffs on up to €93 billion worth of American goods, measures announced last year in response to Trump’s earlier tariff threats.
Those plans had been paused while the trade deal was being finalized, but are now scheduled to take effect on 7 February unless the bloc extends the suspension or approves the agreement.
Hours after the parliamentary decision, Trump said on social media that he had reached a “framework” understanding on Greenland’s future and would not proceed with threats to impose new tariffs on eight Nato members.
Lange, speaking before Trump’s announcement, said there would be no scope for compromise while such threats remained and raised the possibility of deploying the EU’s ‘anti-coercion instrument,’ a package of retaliatory measures often referred to as a ‘trade bazooka,’ an idea also supported by French President Emmanuel Macron.
In a later interview, Lange said it would take time to assess whether Trump’s latest statement could revive the stalled agreement, adding that the implications of the so-called framework needed careful examination.
Some officials in Brussels appeared skeptical of Trump’s sudden reversal, reflecting a growing belief in political and market circles that the U.S. president often backs away from hard-line trade threats.
In his Davos speech, Trump reiterated his interest in the U.S. acquiring Greenland from Denmark but said he did not intend to use force, calling instead for immediate negotiations and later announcing the outline of a future deal.
His comments helped stabilize financial markets after recent volatility. U.S. stocks moved higher in afternoon trading, with the Dow Jones, S&P 500, and Nasdaq each rising more than one percent, while London’s FTSE 100 closed slightly higher.
Gold prices climbed above $4,842 an ounce for the first time, while silver hovered near recent record levels, reflecting continued demand for safe-haven assets amid geopolitical uncertainty.
The United States and the 27-nation European Union remain each other’s largest trading partners, with more than €1.6 trillion in goods and services exchanged in 2024, accounting for nearly one-third of global trade.
Last year’s tariff announcements had prompted threats of retaliation from several governments, though most opted to pursue negotiations instead. China and Canada were among the few to impose counter-tariffs, with Canada later scaling back most of its measures.
U.S. officials have previously urged European leaders to avoid escalating tensions. Ahead of the Davos meetings, Treasury Secretary Scott Bessent called on the EU to remain patient and refrain from immediate retaliation. Adding to the uncertainty, a pending U.S. Supreme Court ruling is expected to determine whether many of the tariffs announced last year are legally valid.
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