EU parliament blocks US trade deal after Trump’s tariff threat | European Union
The European Parliament has formally suspended the ratification process of a US trade deal in protest at Donald Trump’s threat to impose 10% tariffs on EU exports unless the bloc agrees to take over Greenland.
The pause was the EU’s strongest material response yet to what many leaders last week called blackmail.
“Until the threats continue,” said Bernd Lange, chairman of the European Parliament’s trade committee. [on Greenland] “There will be no possibility of compromise on ratifying the US agreement, which promises Americans a new era of 0% tariffs on many industrial exports.”
Lange confirmed that the EU’s promise to buy $750bn (£560bn) of energy would not be affected by the decision as it is separate from the tariff agreement.
In a sign of the decline in transatlantic relations, European Commission president Ursula von der Leyen returned to Brussels after addressing parliament rather than returning to Davos to meet Trump.
He is back to prepare for an emergency summit in Brussels at 7pm on Thursday to discuss a range of options open to the EU if the US president continues his tariff threat.
These include imposing tariffs worth €93bn (£81bn) on US exports to the EU and activating a never-before-used anti-coercion tool seen as a nuclear deterrent to trade sanctions.
Originally designed to limit China’s pressure on individual member states, the law would allow the EU to restrict US businesses’ access to the EU market.
In theory, the EU could target anything from US tech and crypto companies to aircraft manufacturers or agricultural products. But European consumers may balk at extra costs or restrictions on US companies like Apple or Netflix.
While the EU said it was continuing to work on diplomatic solutions to avoid a trade war, Lange acknowledged that “a lot can happen” between now and February 2, when Trump’s tariff threats come true. “Surprises come from the White House every day, every day,” he said.
While a trade war with the US would be hugely damaging, the EU’s attempts to diversify its markets have also been dealt a serious blow by parliament after members of the European Parliament voted by a majority of just 10 votes to refer the Mercosur trade agreement with Latin American countries to the European court of justice.
While the decision was condemned by Lange, the European Commission said that the decision was “regrettable”, and German Chancellor Friedrich Merz, who also condemned this move by automobile manufacturers, also said that the decision was “regrettable”.
The European Commission has the authority to temporarily implement the Mercosur agreement, as well as the Brexit trade agreement with the UK. However, Lange warned that if the Commission went ahead with such a move it would drag the bloc into a “major institutional conflict”.
