BRUSSELS: The European Parliament has taken a significant step by suspending the ratification process of its trade deal with the United States. This decision comes in direct response to Donald Trump's recent threat to impose a 10% tariff on EU exports unless the bloc agrees to discussions about the acquisition of Greenland. This action signifies one of the strongest responses from EU leadership, decried by several leaders as tantamount to blackmail.

European Parliament Trade Committee Chairman Bernd Lange stated, “Until the threats on Greenland are over, there will be no possibility for compromise” regarding the ratification. He emphasized that the EU’s commitment to purchasing $750 billion worth of energy remains unaffected, as it is separate from the current tariff discussions.

As tensions mount across the Atlantic, European Commission President Ursula von der Leyen cut short her itinerary to return to Brussels rather than meeting Trump at Davos, preparing for an emergency summit later this week. This summit aims to discuss potential measures in response to Trump's tariffs, which could include imposing €93 billion in tariffs on US products and activating an anti-coercion trade instrument designed to protect member states from external pressures.

This new legislative tool, largely aimed at countering Chinese influence, could directly affect US tech companies and agricultural exports. However, its implementation risks increasing prices for European consumers and restricting popular US brands like Apple and Netflix.

While the EU is pursuing diplomatic avenues to prevent a full-blown trade war, Lange acknowledged the unpredictability of Trump's decisions, saying, “A lot could happen between now and February 2.” A trade war with the US could have disastrous consequences for the EU. The Parliament's vote to refer the Mercosur trade deal with Latin America to the European Court of Justice adds another layer of complexity to the EU's trade strategy. This move, supported by a slim majority, is viewed by some leaders, including Lange, as detrimental to diversifying market opportunities for the bloc.