European Parliament Halts Trade Deal Ratification Process
The European Parliament put off approving a big trade deal between the US and the EU that was reached earlier in July. Lawmakers said that tensions had risen again because of President Trump’s demand about Greenland’s future.
As Trump spoke to world leaders at the Davos forum, the decision was made public in Strasbourg. European officials said that the suspension was a protest against trade diplomacy that was too aggressive.
Source: The Diplomatic Insight/Website
Greenland Dispute Rekindles Transatlantic Trade Frictions
Trump’s attempt to buy Greenland made European capitals nervous and shook up the world’s financial markets. The move brought back worries about a new trade war between long-time partners.
Investors were on edge as talk of retaliation came up again in policy talks. Leaders in Europe said that economic cooperation and aggressive geopolitical tactics can’t work together.
Turnberry Agreement Now Placed On Hold By Lawmakers
The deal from July had cut the proposed US tariffs on European goods to 15%. In return, Europe promised to make investments and changes to regulations that would help US exports.
Even though it eased tensions, the deal still needed to be approved by Parliament. Trump’s new threats of tariffs suddenly stopped the progress that had been made last summer.
Recommended Article: Greenland Chooses Denmark Over US Amid Annexation Pressure
EU Signals Willingness to Use Tariffs in Response
European lawmakers said that if negotiations were put on hold, planned counter tariffs could go into effect. These steps are aimed at about €93 billion worth of American goods.
The EU had stopped retaliating while talks were still going on, but deadlines are coming up. If there is no progress, the tariffs may automatically go into effect in early February.
Trump Makes a Framework Deal and Then Steps Back
Trump announced a framework agreement on Greenland’s future just hours after the suspension. He also took back threats to put new tariffs on NATO allies.
European officials were careful to respond because they weren’t sure what the announcement meant. Leaders in Parliament said they need more time to see if the tensions have really gone away.
Markets Stabilize As Rhetoric Temporarily Softens
Trump’s comments at Davos and his decision to back off on tariffs helped ease the nerves of the financial markets. At the end of the day, most US indices went up, and European markets went up too.
As uncertainty continued, investors looked for safety, which pushed gold prices higher. Analysts said that precious metals still show signs of doubt, even though politics have calmed down for a while.
Trade Relationship Faces Uncertain Path Forward In 2026
The US and the European Union are still each other’s biggest trading partners in the world. Their economic ties account for almost a third of all trade around the world.
But threats of tariffs that keep coming up hurt trust and make it harder to work together in the long term. Analysts say that long-term stability depends on diplomacy that is predictable, not on short-term brinkmanship.
