EU Freezes Landmark U.S. Trade Deal After Trump Threatens Tariffs Over Greenland

The European Union moved Wednesday to stop the approval process for a major trade agreement negotiated last year with President Donald Trump, effectively putting the deal on ice amid rising tensions.

Bernd Lange, who chairs the European Parliament’s international trade committee, said lawmakers had decided to pause all work on ratifying and rolling out the agreement because of what he described as intensifying pressure from Washington.

“Given the continued and escalating threats, including tariff threats, against Greenland and Denmark, and their European allies, we have been left with no alternative but to suspend work” on the deal, Lange said.

He made clear that the freeze would remain in place unless the White House changed course. “Until the US decides to re-engage on a path of cooperation rather than confrontation,” Lange said, there would be no progress on the agreement.

Lange framed the dispute in stark terms, arguing that fundamental interests were at risk. “Our sovereignty and territorial integrity are at stake,” he wrote on X. “Business as usual impossible.”

The decision followed remarks by Trump on Saturday in which he warned that he would impose tariffs on seven EU member states, along with the United Kingdom, if they refused to let the United States take control of Greenland.

The trade pact itself was finalized last July during a visit by European Commission President Ursula von der Leyen to Trump’s golf resort in Turnberry, Scotland.

At the heart of the agreement was a ceiling on U.S. tariffs, limiting duties on most European imports to 15%, a rate that ranked among the lowest granted to any U.S. trading partner last year.

Certain EU exports, including generic medicines, were set to enter the U.S. market tariff-free under the deal.

In return, the European Union – the United States’ largest trading partner – agreed to cut tariffs on selected American goods, a move designed to boost U.S. farm and industrial exports across the 27-nation bloc.

As of 2024, trade between the U.S. and EU totaled about $1.5 trillion a year in goods and services. On average, the U.S. imports more than $600 billion in products annually from Europe, while EU countries buy more than $360 billion in American goods, according to the U.S. Trade Representative.

When the agreement, often dubbed the “Turnberry deal,” was unveiled, European Commission officials praised it as a stabilizing force, saying it “restores stability and predictability.”

That sense of calm unraveled after Trump’s weekend tariff threat.

“In politics as in business, a deal is a deal,” von der Leyen said Tuesday at the World Economic Forum in Davos, Switzerland. “When friends shake hands, it must mean something.”

Speaking at Davos himself, Trump insisted the United States would not use military force to take Greenland, but he left open the possibility of imposing a 10% tariff beginning Feb. 1.

After Trump’s remarks, Lange addressed reporters and said the president’s comments on avoiding force were “a small positive element.”

Still, Lange warned that tariff pressure would fundamentally alter the relationship. “It’s totally clear that with this 10%-25% [tariffs] pressure, he is really getting into a new quality of relation,” he said.

As long as the tariff threat remains, Lange added, “There will be no possibility for compromise.”

EU leaders from all 27 member states are scheduled to meet Thursday to coordinate their response to Trump’s stance on Greenland.

Among the options under discussion is a sweeping retaliation package valued at nearly $110 billion, targeting U.S. exports ranging from Boeing aircraft to soybeans and Kentucky bourbon.

Another, more aggressive step would involve activating the EU’s so called “Anti-Coercion Instrument,” a mechanism often described by officials as the bloc’s trade “bazooka.”

If deployed, the ACI would give the European Commission authority to impose broad restrictions on U.S. goods and services operating in Europe.

Possible measures include limits on investment, suspending intellectual property protections for American firms, revoking business licenses, and even blocking access to eurozone markets altogether.

The tool was first proposed in 2021 as a deterrent against potential economic coercion by China, but it has never been used.