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, amid Trump's address at the World Economic Forum in Davos, highlighting growing trade tensions between the US and Europe.
The announcement follows Trump's provocative claim about acquiring Greenland, which has reignited fears of retaliation from Europe and the potential for a trade war, with markets reacting negatively to these developments.
In a counter-response, Trump claimed via social media that he had reached a 'framework' deal regarding Greenland and would not impose threatened tariffs on eight NATO allies.
Prior to the suspension, trade relations had shown signs of improvement following a truce in July where US tariffs on European goods were reduced from 30% to 15%, with Europe agreeing to investments in the US to boost exports.
However, Bernd Lange, the chair of the European Parliament's International Trade Committee, stated that the EU could no longer proceed with the legislative proposals due to the recent threats made by Trump.
He emphasized that further actions will be dependent on the US demonstrating a commitment to cooperation over confrontation.
As the situation unfolds, the EU is contemplating the reactivation of previously announced tariffs on a substantial amount of American goods worth €93 billion if the proposed deal does not materialize.
The complexities of the situation underscore the precarious nature of transatlantic trade relations, where Trump's impromptu policy announcements continue to sway financial markets and diplomatic protocols.
During his Davos speech, Trump reiterated his interest in negotiating over Greenland, while financial markets showed signs of stabilization following the announcement—but uncertainties persist over the implications of Trump's decisions.
