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While President Trump addressed world leaders at the World Economic Forum in Davos on Wednesday, the European Parliament in Strasbourg delivered a stinging rebuke by suspending a key U.S. trade deal. The suspension of the July pact is a direct response to the administration’s Greenland takeover bid, a policy shift that has destabilized markets and prompted European lawmakers to prepare for economic retaliation. The move signals that the "steady" global economy warned about by the IMF is now facing its most significant geopolitical test of the year.
Hours later, Trump said on social media he had reached a "framework" deal on Greenland's future and would not carry out threats to put new tariffs on eight Nato members.
Trade tensions between the US and Europe had eased since the two sides struck a deal at Trump's Turnberry golf course in Scotland in July. That agreement set US levies on most European goods at 15%, down from the 30% Trump had initially threatened as part of his "Liberation Day" wave of tariffs in April. In exchange, Europe had agreed to invest in the US and make changes on the continent expected to boost US exports.
The deal would have still required approval from the European Parliament to become official.
But on Wednesday, days after Trump threatened fresh US tariffs over Greenland, Bernd Lange, chair of the European Parliament's International Trade Committee, said it was "left with no alternative but to suspend work on the two Turnberry legislative proposals".
He said work to implement the trade plans would be on hold "until the US decides to re-engage on a path of cooperation rather than confrontation, and before any further steps are taken".
The move renewed the possibility that the EU might move forward with tariffs on a possible €93bn ($109bn, £81bn) worth of American goods it announced last year in response to Trump's "Liberation Day" tariffs.
It had put those plans on hold while the trade deal was being finalised but those levies would now come into force on 7 February unless the bloc moves to extend the pause or approves the new deal.
