EU Parliament Suspends US Trade Negotiations Following Trump Tariff Warning
The European Parliament has officially halted the ratification process of its trade agreement with the United States following Trump's threat to impose 10-percent tariffs on EU exports unless the European Union consents to his acquisition of Greenland.
In a significant move on Wednesday, the European Union delivered its most robust response to date following allegations from top officials last week labeling certain actions as blackmail.
Bernd Lange, the Chair of the European Parliament’s Trade Committee, declared that any compromise regarding the ratification of the U.S. deal, which aims to introduce a new phase of zero-percent tariffs on numerous industrial exports, remains off the table until the “threats on Greenland” are fully resolved.
Lange affirmed that the European Union’s commitment to purchase $750 billion in energy from the United States remains unaffected by the recent developments, as it is independent of the new tariff agreement.
The head of the European Commission steers clear of Trump.
In an indication of deteriorating transatlantic ties, European Commission President Ursula von der Leyen chose to return to Brussels following her address to the European Parliament, foregoing a planned detour to Davos for a meeting with Trump.
She returned to Brussels to prepare for an emergency summit scheduled for Thursday, where European Union leaders will explore various strategies in response to Trump’s potential implementation of tariff measures.
**U.S. Implements ‘Nuclear Deterrent’ Strategy with Trade Sanctions**
The options on the table encompass the imposition of €93 billion in tariffs on American exports to the European Union and the activation of an unprecedented anti-coercion tool, regarded as the “nuclear deterrent” of trade sanctions. This mechanism would enable the EU to limit American businesses’ access to its market, potentially targeting sectors from technology and cryptocurrency firms to aircraft manufacturers and agricultural products.
European consumers might resist any additional costs or limitations imposed on American companies like Apple or Netflix.
The European Union announced its ongoing pursuit of diplomatic solutions to prevent an impending trade war, acknowledging the potential for significant developments before February 2, the date set for the realization of Trump’s tariff threats. “There are consistent daily surprises emerging from the White House,” Lange stated.
**Mercosur Trade Deal in Peril**
Amid escalating tensions with Washington, the European Parliament has delivered a setback to the European Union’s trade diversification efforts. Members of the European Parliament (MEPs) narrowly voted, with a majority of merely 10, to refer the Mercosur trade agreement with Latin American countries to the European Court of Justice for review.
The decision faced strong condemnation from Lange, with the European Commission describing it as “regrettable,” a sentiment shared by German Chancellor Friedrich Merz. German car manufacturers also voiced their opposition to the move.
The European Commission holds the authority to provisionally apply the Mercosur agreement, similar to its actions with the Brexit trade deal with the United Kingdom. Nonetheless, Lange cautioned that pursuing this course could lead the bloc into a significant institutional conflict.
