The European Union (EU) is preparing to halt the ratification process of the EU-US trade agreement after US President Donald Trump threatened new tariffs on Greenland.
Manfred Weber, leader of the European People’s Party (EPP), the largest political group in the European Parliament, stated that progress towards an agreement is not possible under the current conditions.
Weber stated in a social media post on Saturday that the EPP supports the EU-US trade agreement in principle, but approval is not possible at this stage due to Trump’s threats regarding Greenland. Weber also argued that EU commitments to reduce tariffs on US products should be suspended.
The trade agreement in question was shaped by an understanding reached last summer between European Commission President Ursula von der Leyen and Trump. Although some parts of the agreement have begun to be implemented, it requires approval from the European Parliament to fully enter into force. It is stated that if EPP MEPs act together with left-leaning groups, they could secure a sufficient majority to delay or completely block the agreement.
The agreement stipulated that the US would impose a 15% tariff on most EU-origin products, while the EU would eliminate tariffs on US industrial goods and some agricultural products. Von der Leyen had brokered this agreement to avoid a full-scale trade war with the Trump administration. However, many EU MEPs argued that the agreement was unbalanced in favor of the US. These criticisms intensified after the US extended its 50% tariffs on steel and aluminum, already imposed after the July agreement, to hundreds of additional EU products.
Last month, US Trade Representative Jamieson Greer criticized the EU for failing to fulfill some provisions of the agreement, particularly regarding regulations targeting technology companies.
Trump announced yesterday that a 10 percent additional tariff would be imposed on products imported from European countries supporting Greenland, effective February 1. Trump stated that this rate could be increased to 25 percent “until an agreement is reached for the complete and definitive purchase of Greenland.” This announcement was met with strong criticism in European capitals.
Von der Leyen stated that the tariffs would “weaken transatlantic relations and increase the risk of a dangerous downward spiral,” while French President Emmanuel Macron described Trump’s threats as “unacceptable.”
Bernd Lange, chairman of the European Parliament’s Trade Committee, also stated that a fundamental condition of any trade agreement is respect for national sovereignty. Following Trump’s statements, Lange said that work on implementing a trade agreement with the US should be suspended until the threats cease. He also called on the EU to activate the “anti-coercive instrument” (ACI), which has never been used before, if necessary.
*This is not investment advice.