EU to suspend approval of US tariffs deal

The European Parliament plans to suspend approval of the US tariff deal agreed in July, according to sources close to the international trade committee.

The suspension decision is planned to be announced in Strasbourg, France, on Wednesday.

The move would mark a new escalation of tensions between the US and Europe as Donald Trump steps up efforts to buy Greenland and threatened new tariffs on the issue over the weekend.

This has shaken financial markets, reigniting rumors of a trade war and the possibility of retaliation against US trade measures.

Shares on both sides of the Atlantic fell on Tuesday; European stock markets saw a second day of losses, with the three major US stock indexes falling more than 1% in morning trading.

The US dollar also fell sharply in foreign exchange markets. The euro rose 0.8% against the dollar to $1.1742, while the pound sterling rose 0.2% to $1.346.

Trade tensions between the US and Europe have eased since the two sides reached a deal at Trump’s golf course in Scotland in July.

This deal reduces US tariffs on European goods to 15% from the 30% Trump had initially threatened.”Independence Day” Wave of tariffs in April. In return, Europe had agreed to invest in the US and make changes to the continent that were expected to increase US exports.

The agreement still requires approval from the European Parliament to become official.

But on Saturday, a few hours after Trump threatened to impose US tariffs on Greenland, Manfred Weber, an influential German member of the European Parliament, said “approval is not possible at this stage”.

The EU had suspended plans to retaliate against US tariffs with its own package targeting €93bn ($109bn, £81bn) worth of American goods while the two sides negotiated.

However, this reprieve will end on February 6, meaning EU tariffs will come into force on February 7 unless the bloc acts to extend it or ratify the new deal.