EU freezes US trade pact after Trump’s Greenland threat

A major trade deal between the United States and the European Union is at a standstill after the European Parliament decided to suspend ratification. The reason is Donald Trump’s increasing threats to claim Greenland, a Danish territory. If necessary with sanctions.

European dissatisfaction about Trump threats

Tensions between the EU and the US continue to rise. Trump is threatening import duties on eight European countries if he does not reach an agreement on the purchase of Greenland. The European Parliament’s trade committee therefore decided on Wednesday to postpone the planned ratification vote.

The agreement, which was concluded last year, provides for the removal of tariffs on American industrial goods. In return, EU countries would charge a fifteen percent tariff on a large part of their exports to the US. That partial implementation is now in doubt.

“By threatening the territorial integrity of an EU member state and using tariffs as leverage, the US is undermining the stability of our trade relationship,” said Bernd Lange, chairman of the International Trade Committee.

Escalation affects geopolitical stability

The crisis comes at a sensitive time. The European Union previously tried to avoid a trade war, partly because of its dependence on American security guarantees during the war in Ukraine.

But Trump’s threat to take over Greenland reinforces the feeling among MEPs that Europe has conceded too much. His recent announcement of additional import duties of up to 25 percent if he does not reach an agreement is also causing proponents to reconsider their support for the pact.

Manfred Weber, leader of the largest group in the European Parliament, stated that “there will be no free access for American products as long as the reliability of the US is not guaranteed.”

EU is considering countermeasures

European government leaders will meet in Brussels on Thursday to determine their answer. Countermeasures are discussed, including import duties on 93 billion euros worth of American products. The so-called instrument against economic coercion is also on the table, with which investments can be limited.

“Europe chooses dialogue, but is fully prepared to take decisive action,” said Ursula von der Leyen, President of the European Commission.

The agreement was already controversial even before the recent developments. There was a lot of criticism within parliament, especially after the US expanded its metal tariffs and imposed additional requirements on European tech legislation. The Greenland issue has further fueled this dissatisfaction.