BRUSSELS — The ratification of a significant transatlantic trade agreement has been stalled by the European Parliament following President Donald Trump’s imposition of new tariffs on European countries. This decision coincides with Trump’s controversial bid to acquire Greenland from Denmark, creating further diplomatic tensions.
Future of the trade deal in jeopardy
The European Parliament has confirmed it will not advance the ratification of the trade deal, which was initially signed by Trump and European Commission President Ursula von der Leyen in July of last year. This development raises substantial questions about the stability of the trade agreement, designed to set U.S. tariffs on EU imports at 15 percent in exchange for the EU refraining from imposing levies on American goods.
“The EPP is in favor of the EU-U.S. trade deal, but given Donald Trump’s threats regarding Greenland, approval is not possible at this stage,”
wrote Manfred Weber, president of the European People’s Party (EPP). “The 0 percent tariffs on U.S. products must be put on hold.”
While some coalition members within von der Leyen’s government—such as the center-left S&D, centrist Renew, and left-wing Greens—had previously advocated for a strategic delay in the deal’s implementation, the EPP had remained indecisive until recent events prompted clarity. Lawmakers had initially postponed a decision regarding the ratification freeze amidst escalating U.S.-European tensions over Trump’s demands regarding Greenland.
Potential repercussions and EU responses
A vote was expected on January 26, which would outline the European Parliament’s stance on lifting tariffs on U.S. industrial products, a central feature of the trade agreement formed between Brussels and Washington last summer. However, the European Parliament is now poised to confirm the suspension of the deal in an upcoming meeting.
Karin Karlsboro, the Swedish MEP and trade coordinator for Renew, expressed skepticism about the deal’s viability. She stated, “I see no possibility for the European Parliament to give the green light to move forward with the tariff agreement when we take a decision on Wednesday. Instead, the EU must prepare to respond to President Trump’s tariff attacks…”
Karlsboro highlighted the potential for retaliatory tariffs or the deployment of the EU’s Anti-Coercion Instrument—referred to as the “trade bazooka”—in response to Trump’s aggressive tariff measures. This instrument encompasses a variety of punitive actions against trade threats, including investment restrictions and limitations on public procurement access.
While the European Parliament has voiced its concerns, the decision to activate the Anti-Coercion Instrument ultimately rests with the European Commission, which would need a qualified majority of member states to support such a move. This could prove challenging due to longstanding divisions among EU nations regarding the extent of their actions against the U.S.
Valérie Hayer, leader of Renew, condemned Trump’s actions as “unacceptable,” asserting the need for the EU to shift from a posture of reliance to one of deterrence. She urged the EU to consider deploying targeted countermeasures, emphasizing that the Anti-Coercion Instrument was designed for scenarios of economic intimidation.
Echoing this sentiment, Bernd Lange, a German S&D MEP and chair of the European Parliament’s trade committee, supported the immediate invocation of the Anti-Coercion Instrument. He remarked, “If trade policy is used as a political lever, we can resist it with various measures.”
Trump announced an additional 10 percent tariff on European nations contributing troops to a deployment in Greenland, which is set to escalate to 25 percent starting June 1, remaining until a comprehensive agreement regarding Greenland’s ownership is reached.
European leaders have expressed outrage over Trump’s tariff threats, with European Council President António Costa warning that the new tariffs would provoke a united response from Europe.