Greenland row escalates: After Trump's tariff threat, EU moves to suspend US trade deal

The European Parliament is planning to suspend approval of the EU-US trade deal agreed last July in response to President Donald Trump’s threat to impose new tariffs on European nations over Greenland.

The decision is expected to be formally announced in Strasbourg on Wednesday, signaling heightened tensions between Washington and its European allies, according to the BBC.





The July 2025 trade deal, struck at Trump’s golf course in Scotland, reduced US tariffs on European goods to 15% from the 30% initially threatened in April, in exchange for European investments in the US and measures to boost American exports.

The voting was initially scheduled for January 26-27, where lawmakers were expected to remove tariffs on US industrial goods under the deal. However, influential European Parliament members, including Manfred Weber of the European People’s Party, said approval is not possible at this stage following Trump’s weekend tariff threats.

Trump has warned of 10 per cent tariff from February 1 on goods from Denmark, Sweden, France, Germany, the Netherlands, Finland, the UK, and Norway until the US is allowed to acquire Greenland, a self-governing territory of Denmark.

European officials condemned the US move as coercive. French foreign minister Jean-Noel Barrot said that the threat of customs duties “is being used as blackmail to obtain unjustifiable concessions”.

He added that the European Commission has “very powerful instruments” to respond. In a post on social media, he emphasized that France remains committed to security cooperation with the US but is prepared to reject unacceptable proposals, according to Reuters.

The tariff threat has revived fears of a trade war, rattling global markets. European stock indices fell for a second consecutive day on Tuesday, while the Dow, S&P 500, and Nasdaq were down more than 1% in early US trading. On currency markets, the euro climbed 0.8% to $1.1742 and the pound rose 0.2% to $1.346, while the US dollar slipped sharply.

The EU had previously held off retaliatory measures against US tariffs worth €93 billion ($109 billion), scheduled to resume on February 7 unless an agreement or extension is reached.

Denmark, backed by the EU, has stressed diplomatic channels remain open despite the strong stance.

Danish Foreign Minister Lars Løkke Rasmussen said, “The US is also more than the president. Checks and balances exist in American society.”

Meanwhile, French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni have voiced readiness to defend Greenland, with Meloni describing Trump’s threat as a “mistake.”