Amid escalating tensions with the United States over President Donald Trump‘s ambitions for Greenland, the European Parliament (EP) will soon announce the suspension of approval of the US trade deal agreed in July. Sources close to its international trade committee told the BBC about the move.
According to the BBC, the EP will announce the suspension in Strasbourg, France, on Wednesday.
The suspension will mark an escalation in tensions between the US and the European Union (EU), which has gone up a notch following Trump’s announcement of fresh, incremental tariffs on eight European nations over the Greenland issue.
Markets opened lower on both sides of the Atlantic on Tuesday, amid growing fears of a trade war ahead of Wednesday’s announcement.
The EU-US trade deal was crucial insofar as it had helped cool tensions between the bloc and its ally across the Atlantic.
Struck in July in Scotland, the deal brought down US tariffs on European goods to 15%, from 30% earlier, with the EU agreeing to invest in the US and make changes to boost American exports.
That said, the deal still needs formal approval from the EP to become official, something that is an unlikely possibility at this stage.
On Saturday, within hours of Trump announcing fresh tariffs on eight European nations over the Greenland issue, Manfred Weber, an influential German member of the EP, said that “approval [of the EU-US trade deal] is not possible at this stage”, as per the BBC.
Further, Bernd Lange, who chairs the EP’s committee on international trade, said there was “no alternative” but to suspend the EU-US trade deal due to Trump’s threats.
“By threatening the territorial integrity and sovereignty of an EU member state and by using tariffs as a coercive instrument, the US undermines the stability and predictability of EU–US trade relations,” Lange was quoted as saying.
It should be noted that Lange’s committee needs to sign off on the EU-US trade deal before it heads to the EP for a final vote.
Beyond the suspension of the EU-US trade deal as an immediate response to Trump’s threats, there is also a possibility of the bloc introducing retaliatory tariffs on American goods and services.
In 2025, in response to Trump’s ‘Liberation Day’ tariff threats, the EU had said that it would impose levies on a whopping $109 billion of US goods and services, but had held off on imposing the same in view of the EU-US trade deal.
However, the BBC reported that the reprieve granted to American exports expires on 6 February 2026, and if the trade deal is called off as reported, levies on US goods and services could be implemented as soon as 7 February.
The EU and the US are each other’s biggest trade partners, with $1.9 trillion worth of goods and services exchanged in 2024, BBC reported, citing European figures.