Key Points
- EU lawmakers are threatening to block a major trade deal with the U.S.
- The move is in response to President Trump’s threats to impose tariffs on countries that support Greenland.
- Trump announced a new 10% tariff on European goods, which could rise to 25%.
- The trade deal, struck last summer, still needs the European Parliament’s approval. European leaders have called Trump’s threats “unacceptable.”
European Union lawmakers are threatening to put a major trade deal with the United States on ice after President Trump vowed to impose new tariffs on countries that have supported Greenland. The dispute over the semi-autonomous Danish territory has now spilled into trade, putting a carefully negotiated agreement at risk.
Manfred Weber, the leader of the largest political group in the European Parliament, said on Saturday that approving the deal is “not possible at this stage.” He called for the agreement, which would lower tariffs on U.S. products, to be “put on hold.”
The trade deal, struck last summer, was designed to avoid a full-blown trade war between the EU and the U.S. It set a 15% U.S. tariff on most EU goods in exchange for the EU eliminating duties on American industrial goods. While the deal has been partially implemented, it still requires final approval from the European Parliament.
The latest firestorm was ignited on Saturday when Trump announced a new 10% tariff on goods from European countries that have rallied to support Greenland amid U.S. threats to seize the territory. He said the tariffs would increase to 25% unless a deal is reached for the “Complete and Total purchase of Greenland.”
European leaders were quick to condemn the move. French President Emmanuel Macron called the threats “unacceptable,” and the head of the European Parliament’s trade committee said that work on the trade deal should be suspended until the threats cease.
This is a serious escalation in the transatlantic trade tensions. If EU lawmakers follow through on their threat to block the deal, it could trigger a dangerous downward spiral of tariffs and counter-tariffs, hurting businesses and consumers on both sides of the Atlantic.
