Representatives of the European Union will not approve a key transatlantic trade agreement after US President Donald Trump imposed new tariffs on European countries as part of his efforts to wrest control of Greenland from Denmark.
Confirmation that the European Parliament will not proceed with the ratification of the agreement, which Trump and European Commission President Ursula von der Leyen signed last July, casts the future of the truce in the trade war into uncertainty, writes Politico.
In an online statement, Manfred Weber, president of the European People’s Party (EPP), said that the escalation of tensions between the US and Europe means that Parliament will not vote in favor of the pact, which sets US tariffs on imports from the EU at 15 percent in exchange for the Union not imposing duties on American exports.
“The EPP supports the EU-US trade agreement, but given Donald Trump’s threats regarding Greenland, approval is not possible at this stage. Zero-percent tariffs on American products must be put on hold,” Weber said.
While other members of Ursula von der Leyen’s governing coalition, the center-left (S&D), centrists (Renew), and left-leaning Greens, have in recent weeks advocated a strategic pause in the implementation of the trade agreement, her own EPP party had so far not been convinced by that move.
On Wednesday, lawmakers postponed a decision on whether to freeze the ratification of the agreement amid tensions over Trump’s demand that Denmark hand over Greenland to the United States.
The vote was scheduled for January 26, and it would determine the European Parliament’s position on eliminating tariffs on American industrial goods, which is one of the key points of the agreement reached between Brussels and Washington last summer.
The agreement with Washington “will not be postponed,” EPP MEP Željana Zovko said at the time. EU lawmakers are now expected to confirm the freezing of the agreement during a meeting next Wednesday.
Karin Karlsbro, a Swedish Member of the European Parliament (MEP) who serves as trade coordinator for the Renew group, told Politico on Saturday that the EU-US agreement will not receive sufficient support from lawmakers.
“I see no possibility that the European Parliament will give the green light to continuing the tariff agreement when we make a decision on Wednesday. Instead, the EU must prepare to respond to President Trump’s tariff attacks, including those directed against Sweden. We cannot rule out retaliatory tariffs or the use of the ‘bazooka’ if pressure and coercion continue,” she said.
The EU’s so-called trade “bazooka,” the Anti-Coercion Instrument, offers a range of punitive measures that can be used against trade rivals attempting to undermine the bloc. These include restrictions on investment and access to public procurement schemes, as well as limits on intellectual property protection.
Despite calls from the European Parliament, the decision to activate the Anti-Coercion Instrument would lie with the European Commission if Trump carries out his latest threat. This would then require the support of a qualified majority of member states, which could prove difficult given longstanding divisions among European capitals over how far to go without further antagonizing Washington.
Renew group leader Valérie Hayer called Trump’s moves “unacceptable” and said that “now is the time to move away from reliance on deterrence.”
“The EU should be ready to apply targeted and proportionate countermeasures. Activating the EU Anti-Coercion Instrument should be explicitly considered, as it is designed precisely for situations of economic intimidation of this nature,” she said.
Bernd Lange, a German lawmaker from the S&D group and chair of the European Parliament’s trade committee, also backed the unprecedented use of the “bazooka” in a statement to Politico.
“What we had in mind when drafting the Anti-Coercion Act is now becoming reality: If trade policy is used as a political lever, we can resist it with various measures. Therefore, I call on the European Commission to immediately initiate proceedings and an investigation,” he said.
S&D vice-president for trade Kathleen Van Brempt joined calls for the use of the anti-coercion instrument. Approving the trade agreement, in her words, “would not be ‘pragmatic,’ but completely insane.”
“It is nothing short of scandalous that Donald Trump is using tariffs and economic threats to extort an illegitimate territorial claim. If this is not coercion, then what is?” Van Brempt said in a statement.
Trump announced on Saturday an additional 10 percent tariff on European countries that contributed troops to a small contingent that arrived in Greenland earlier this week. That tariff will increase to 25 percent starting June 1, he said, and will remain in force “until an agreement is reached on the full and total purchase of Greenland.”
European leaders reacted angrily, insisting that the deployment of troops to Greenland was a response to Trump’s claims of growing Russian and Chinese threats to the North Atlantic island. European Council President António Costa warned Washington that the new tariffs would meet a “joint response.”
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