Tensions between Washington and Brussels reached a new peak as the European Parliament moves to suspend the approval of the trade deal struck in July.
The decision, expected to be officially announced in Strasbourg on Wednesday, comes after US President Donald Trump threatened new tariffs as part of his renewed push to acquire Greenland.
Manfred Weber and Bernd Lange, influential voices in the European Parliament, stated that approval is no longer possible while the US uses tariffs as a “coercive instrument” against the territorial integrity of an EU member state.
The standoff has ended the temporary peace established at Trump’s Turnberry golf course last summer, where both sides had agreed to lower levies.
The fallout has sent shockwaves through global financial markets:
Wall Street saw significant losses on Tuesday, with the S&P 500 dropping over 2% and the Nasdaq falling 2.4%. Meanwhile, the US dollar steadied after a 0.5% overnight drop, its sharpest daily fall since December.
Gold prices rose above $4,800 an ounce for the first time in history, while silver hovered near record highs above $94.
French President Emmanuel Macron, speaking at the World Economic Forum in Davos, described the US tactics as “fundamentally unacceptable.”
He urged the bloc to consider the “trade bazooka”, an anti-coercion instrument, to protect European interests.
Unless an extension is granted or the deal is approved, the EU’s suspended €93 billion ($109 billion) retaliatory tariff package will automatically come into force on February 7.
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