The European Parliament has suspended its work on implementing a planned EU-U.S. customs agreement following U.S. threats of new tariffs linked to the dispute over Greenland, the chair of the parliament’s trade committee said Wednesday.
"With the threat of extra tariffs in connection with Greenland, the U.S. President has finally gone too far," Bernd Lange said in a statement.
U.S. President Donald Trump has threatened several EU states plus Norway and Britain with extra tariffs for standing in his way over his bid to acquire the Danish Arctic island.
Trump told the World Economic Forum in Davos on Wednesday that he would not use force but still wants to do a deal to take over Greenland.
Denmark, Finland, France, Germany, the Netherlands and Sweden were among nations who recently sent a small number of soldiers on a reconnaissance mission to Greenland, prompting Trump's tariffs threat.
The trade deal that has now been halted was to enable the import of industrial goods from the U.S. to the EU duty-free. It would also have improved EU market access for certain seafood and agricultural products.
In return, Trump had originally waived a special 30% tariff on EU imports last year and also began to cut car tariffs.
The European Commission began implementing this deal months ago but the European Parliament and member states needed to approve related regulations.
However, the parliament has decided not to pass these now after Trump threatened rising tariffs starting Feb. 1 over Greenland.
After EU lawmakers met to negotiate the joint parliamentary position, Lange said Trump had broken the agreement by announcing an additional tariff on European goods if Greenland did not belong to the United States by June.
Trump has repeatedly said he seeks to own Greenland in order to guarantee security in the Arctic region amid concerns about threats from China and Russia.
Largely autonomous Greenland is part of the territory of Denmark, a NATO member. Greenland has said it does not wish to become part of the U.S., while NATO allies say the US does not need to control the island to protect the Arctic.
Lange also vowed to discuss further steps in response to Trump's tariff threats in the European Parliament's Trade Committee next week - with options including an instrument designed to counter coercive economic measures.
The Anti-Coercion Instrument (ACI), dubbed the EU's "trade bazooka," was adopted in 2023, can be used in cases of economic coercion when a non-EU country attempts to pressure the bloc or one of its 27 members into making a decision through trade restrictions.
French President Emmanuel Macron has already backed its use in the Greenland row.
The range of countermeasures the EU can apply is broad, ranging from customs duties, import and export restrictions on goods and services or various restrictions on access to the EU market.
Retaliatory measures under the ACI are only a last resort and must be proportionate.
To apply the instrument, the EU Commission first has to examine whether economic coercion is present in the case. EU countries must then back the commission's conclusion, before the EU's executive arm ideally enters into talks with the country.