EU Hits Pause on Trade Deal With US After Trump's Tariff Threat Over Greenland

Washington: The European Union has put a major transatlantic trade agreement with the United States on hold, sending a clear political message to Washington. 

The move comes after US President Donald Trump threatened fresh tariffs, linking trade pressure to his long-standing demand over Greenland.

The decision was taken by the European Parliament, which said the current atmosphere no longer supports trust-based negotiations. Officials described the freeze as a defensive step, not a breakdown, but acknowledged that relations have entered a tense phase.

Why did the EU pull the brakes now?

According to EU lawmakers, Trump’s remarks crossed a red line. His suggestion that trade tariffs could be used as leverage over Greenland, an autonomous territory under Denmark, alarmed European leaders.

Several Members of the European Parliament said trade cannot be mixed with territorial or political pressure. 

Manfred Weber, who heads the European People's Party, said lawmakers could not back a pact while Trump was issuing threats tied to Greenland.

"The EPP is in favour of the EU–U.S. trade deal, but given Donald Trump’s threats regarding Greenland, approval is not possible at this stage. The 0% tariffs on U.S. products must be put on hold," Weber said in a post on X.

The Parliament voted to suspend progress until there is clarity on the US position.

What was this trade pact about?

The proposed agreement aimed to reduce trade barriers and boost investment between the EU and the US. It was seen as a strategic step at a time when both sides face economic pressure and rising competition from China.

Negotiators had already cleared several technical hurdles. But political trust, EU officials say, is just as important as economic logic.

For now, all talks linked to the pact have been shelved.

How did Greenland enter the picture?

Trump has repeatedly expressed interest in Greenland, citing its strategic location and natural resources. His earlier attempts to push the issue were dismissed by Denmark and Greenland’s leaders.

The latest tariff-linked remarks revived old tensions. EU lawmakers said the comments were inappropriate and risked destabilising diplomatic norms.

“This is not how partners behave,” an EU Parliament member remarked.

What does this mean for US-EU relations?

The freeze does not end trade relations, but it sends a warning. European leaders want assurances that future negotiations will remain free of political coercion.

Trade experts say the pause could delay economic gains on both sides, especially for exporters already facing global uncertainty.

However, EU officials stressed that the door is not closed. Talks could resume if the US tones down its rhetoric and recommits to standard trade practices.