European Parliament Set to Suspend Approval of US Trade Deal Amid Greenland Dispute

The European Parliament is preparing to suspend the ratification of the US trade deal agreed in July, according to sources close to its committee on international trade. The announcement is expected to be made on Wednesday in Strasbourg, France, marking a significant escalation in tensions between the US and Europe. The move comes as Donald Trump intensifies his efforts to acquire Greenland, prompting threats of new US tariffs over the issue during the weekend.

The standoff has unsettled financial markets, reigniting concerns about a potential trade war and the possibility of retaliatory measures against the US. On Tuesday, stock markets on both sides of the Atlantic experienced losses, with European equities declining for a second consecutive day. In the US, the Dow Jones fell more than 1.7%, the S&P 500 dropped over 2%, and the Nasdaq closed around 2.4% lower. Asia-Pacific markets were mixed on Wednesday, with major indexes in Japan and Hong Kong trading slightly down, while shares in mainland China and Hong Kong posted modest gains.

Precious metals continued to attract investor attention as safe-haven assets, with gold rising above $4,800 (£3,570) an ounce for the first time, while silver slipped from Monday’s record high above $95 an ounce. In currency markets, the US dollar remained steady against major peers after a 0.5% drop overnight, marking its largest single-day fall since early December.

Trade relations between the US and Europe had eased following the Turnberry agreement in Scotland in July, which reduced US levies on most European goods to 15%, down from the 30% Trump had initially threatened in April’s so-called "Liberation Day" wave of tariffs. In exchange, Europe committed to investing in the US and implementing changes expected to boost American exports. The agreement, however, still requires European Parliament approval to become official.

On Saturday, in the wake of Trump’s tariff threat over Greenland, Manfred Weber, a prominent German MEP, declared that "approval is not possible at this stage." Bernd Lange, chair of the European Parliament’s international trade committee, reinforced this position, stating there was "no alternative" but to suspend the deal due to US actions regarding Greenland. Lange explained, "By threatening the territorial integrity and sovereignty of an EU member state and by using tariffs as a coercive instrument, the US undermines the stability and predictability of EU–US trade relations."

Lange added, "There is no alternative but to suspend work on the two Turnberry legislative proposals until the US decides to re-engage on a path of cooperation rather than confrontation, and before any further steps are taken." His committee must approve the deal before it moves to the European Parliament for a final vote, meaning the suspension effectively halts progress on the agreement until the Greenland-related tensions are resolved.

By fLEXI tEAM