European lawmakers have suspended a major US trade agreement after President Donald Trump threatened new tariffs on European allies as leverage in his push to acquire Greenland.
The move marks Europe’s sharpest response so far to Trump’s Greenland rhetoric and escalating trade pressure, according to ABC News. The European Parliament paused ratification of the deal just minutes after Trump repeated his claims during a World Economic Forum speech in Davos.
Trump has warned that tariffs of 10% would hit eight European countries starting in February, rising to 25% by June, unless negotiations begin over Greenland’s transfer to US control. Denmark, which governs Greenland as a self-ruling territory, has rejected the idea outright.
BREAKING: The EU Parliament has SUSPENDED approval of the U.S.–EU trade deal after Trump threatened 10–25% tariffs on Europe and revived his push to take Greenland. EU lawmakers say Trump’s Davos remarks violated the pact’s terms.
“Appeasement does not bring peace. It invites… pic.twitter.com/ZcbD3TYGpT
— Ed Krassenstein (@EdKrassen) January 21, 2026
Valérie Hayer, chair of the Renew Europe parliamentary group, said Europe’s previous approach toward Trump had failed. “We should acknowledge that the appeasement strategy is over,” Hayer said, adding that the EU must now “play hardball,” per Euronews.
Hayer argued that Trump only responds to power and leverage. She pointed to Europe’s economic tools, including tariffs, debt holdings, and the bloc’s rarely used Anti-Coercion Instrument, sometimes described as the EU’s “trade bazooka.”
She said, “We could decide new tariffs. We could decide to sell American debt. Do you know that we have more than $1 trillion of American debt?”
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Bitcoin slides below $88k as EU freezes US trade talks over Greenland tensionshttps://t.co/2F5cPfOuLx Bitcoin extended its recent decline, falling below $88,000 as the European Parliament suspended progress on the “Turnberry” trade deal. pic.twitter.com/ufG0Ar7EeV
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The Anti-Coercion Instrument would allow the EU to restrict US companies’ access to the single market, a move that could affect industries ranging from tech to aviation.
The European Parliament’s decision formally halts ratification of a July trade deal that was meant to lower tariffs and stabilize transatlantic trade. Bernd Lange, chair of the Parliament’s trade committee, said there would be “no possibility for compromise” while tariff threats linked to Greenland remain.
Lange described Trump’s demands as blackmail and said the threats undermine the predictability of EU-US trade relations. He added that while the tariff deal is paused, a separate EU commitment to purchase US energy would continue.
Trump addressed the Greenland issue directly in Davos, insisting he would not use military force. “I won’t do that,” Trump said, after stating the US would be “unstoppable” if it chose to use force.
Trade Deals with the European Union: Over the summer, President Trump secured a deal with the European Union to enhance the economic relationship between the world’s two largest economies.
The historic deal lowers EU tariffs on U.S. exports and services and secures $750 billion… pic.twitter.com/0M8oiGJ6ei
— United States Trade Representative (@USTradeRep) January 20, 2026
Despite ruling out military action, Trump again tied Greenland to broader complaints about Europe and NATO. “We give so much, and we get so little in return,” he said, per The Guardian’s live coverage.
European leaders pushed back. French President Emmanuel Macron warned against “the law of the strongest,” and talked about not submitting to “bullies,” while European Commission President Ursula von der Leyen said any EU response would be “unflinching, united and proportional.”
Von der Leyen cut short plans to remain in Davos and returned to Brussels to prepare for an emergency summit, where retaliatory tariffs and sanctions were set to be discussed.
🇨🇳🤝🌏 Voices from China in Davos are applauded:
“The world cannot return to the law of the jungle, where the strong prey on the weak.”
“China is willing to be not only the world’s factory, but also the world’s market.”
Globalization faces challenges from rising protectionism.… pic.twitter.com/Sguf6iYQfz
— Li Zexin 李泽欣 (@XH_Lee23) January 21, 2026
Markets reacted quickly. US stocks slid following Trump’s tariff threats, with the Dow dropping sharply before partially recovering. European markets also edged lower amid growing uncertainty.
The trade freeze adds to mounting pressure in Washington, where tariff escalation and stalled diplomacy are feeding broader economic anxiety. While Trump insists the US economy is booming, Europe’s decision signals that allies are no longer willing to absorb pressure quietly.
As Hayer doubled down, Europe’s message is now explicit: calm restraint has run out.
