EU Hits Pause on US Trade Deal Amid Greenland Tensions

Tue Feb 03 2026 14:27:25 GMT+0200 (Eastern European Standard Time)

The European Parliament suspends a crucial trade deal with the U.S. after President Trump's controversial bid for Greenland, signaling renewed trade tensions.

In a significant move, the European Parliament has stalled the approval of a major trade deal with the United States, following President Trump's provocative proposal to acquire Greenland. This decision was announced during his speech at the World Economic Forum, raising concerns about trade tensions and potential retaliatory tariffs. As diplomatic relations between the U.S. and Europe strain, the upcoming decisions could impact over €93 billion of American goods, warning of a potentially escalating trade war.

The European Parliament has suspended the approval of a key US trade deal agreed in July in protest against Donald Trump's demand to take over Greenland. The suspension was announced in Strasbourg, France, as the US president addressed the World Economic Forum in Davos.

This move followed renewed trade tensions between the US and Europe, sparked by Trump's bid to acquire Greenland, which rattled financial markets and revived the specter of a trade war.

Hours after the suspension, Trump stated on social media that he had reached a framework deal regarding Greenland's future and claimed he would not impose new tariffs on eight NATO members.

Initially, trade tensions had eased after the agreement made at Trump's Turnberry golf course in July, which lowered tariffs from 30% to 15% on many European goods. However, the recent threats from Trump over Greenland forced the European Parliament's International Trade Committee to suspend its legislative process until the US chooses a cooperative path rather than a confrontational one.

The suspension may lead the EU to implement tariffs on €93 billion ($109 billion) worth of US goods originally planned last year in retaliation for Trump's earlier tariffs.

Throughout his address in Davos, Trump reiterated his interest in acquiring Greenland, promoting it as critical for US security. He suggested a framework for negotiations while also downplaying the use of force.

His statements momentarily calmed financial markets, boosting stocks on both sides of the Atlantic, while precious metals continued to see price rises, seen as safe assets amid uncertainty.