The European Parliament’s move to suspend work on an EU-US trade agreement is a dramatic shift in the already fragile state of transatlantic relations. The move comes against the backdrop of renewed pressure from President Donald Trump regarding Greenland and tariff threats against European allies. The trade between the EU and the US is valued at over €1.3 trillion per year. This means that the current standoff is more than a symbolic gesture. The message is clear: Brussels will not be coerced.
Why Greenland Changed the Equation
Trump’s attempt to seize control over the self-governing Danish territory of Greenland has struck a chord with Europe. During his remarks at the World Economic Forum in Davos, he was met with swift rebuke from EU members. “Linking territorial ambitions to trade talks crosses a line,” according to lawmakers from the bloc. Denmark accounts for just a small fraction of trade with the EU, but at its core, the underlying issue speaks to the heart of the EU’s sovereignty and unity.
What is Inside the Frozen Trade Deal
At the heart of the row is a deal that was agreed last summer in Turnberry, Scotland. The agreement was to scrap most import duties on American products in the EU, while continuing to offer zero tariffs on US lobster exports, a deal first struck in 2020. In exchange, the US would continue to average an overall tariff rate of 15 percent. The deal has long been deemed one-sided by critics in the Parliament.
Growing Unease in Brussels
Although there were misgivings, parliamentarians were ready to proceed with the safety nets, including an 18-month sunset clause and emergency provisions to cope with unexpected import surges. Votes in the Parliament trade committee were set for January 26 and 27. These votes are now postponed indefinitely. “The latest tariff threats by Trump have, in effect, vitiated the political context of the agreement,” said Bernd Lange, the trade committee chairman.
Where EU–US Trade Relations Go From Here
However, there are risks involved in suspending the agreement. The US may react by imposing higher tariffs, which will increase tensions at a time when global trade growth is slowing down. The World Trade Organization estimates that new trade barriers erected since 2022 have impacted close to 10 percent of global trade. The US has also indicated that it will not make any concessions until the agreement is restored. Currently, it seems that the EU is ready to withstand the pressure rather than support an agreement that is the result of ultimatums.
