EU stalls US trade deal as Greenland tariff row escalates

Greenland

EU stalls US trade deal as a direct response to President Trump's Greenland-linked tariff threats. EU leaders will meet on 22 January to coordinate a unified response and reassess transatlantic economic engagement. Meanwhile, the European Parliament is preparing to freeze implementing laws for the EU-US trade deal agreed last summer. As a result, EU stalls US trade deal at precisely the moment businesses across North America and Europe seek stability.

Greenland tariffs derail EU-US trade deal momentum

EU leaders are weighing a tough response after Trump threatened to annex Greenland and impose a new 10pc tariff. The measures would hit imports from France, Germany and five other European countries from 1 February, rising to 25pc in June. The threatened tariffs specifically target countries involved in a military mission in Denmark’s Greenland territory, widening the geopolitical rift.

The stalled EU-US trade deal had locked in a 15pc US baseline tariff and 0pc tariffs on selected EU-bound US exports. However, lawmakers now argue that EU stalls US trade deal implementation until Washington withdraws its Greenland-linked tariff threats. As a result, European politicians are signalling that no agreement offering 0pc tariffs can move forward under open coercive pressure.

European Parliament trade chair Bernd Lange urged using all available tools, including the anti-coercion instrument (ACI). Meanwhile, EPP group leader Manfred Weber said that approval of the pact is “not possible at this stage”. Their stance confirms that EU stalls US trade deal not just tactically, but as part of a wider strategic rethink.

Anti-coercion instrument raises stakes for supply chains

The EU’s anti-coercion instrument would allow Brussels to curb US access to goods, services and public procurement markets. Therefore, any escalation could hit key transatlantic value chains, including autos, machinery, chemicals and high-end manufactured goods. For metals, this would feed into steel, aluminium, copper and specialty alloy demand linked to these sectors.

The ACI also covers foreign direct investment and financial markets, increasing uncertainty for cross-border industrial projects. As a result, companies with integrated EU-US manufacturing footprints face higher risk premia and more complex trade planning. This comes as tariffs already feature prominently in US economic policy, further complicating capital allocation decisions.

The Greenland dispute will also follow leaders to Davos, where Trump and senior EU figures will share a stage. Any harsh rhetoric could harden positions and accelerate planning for retaliatory steps on both sides. Investors and industrial players will watch closely for signals on how far the EU is willing to push the ACI lever.

The Metalnomist Commentary

The current standoff shows how quickly geopolitics can override the economic logic of a hard-won trade deal. For metals and manufacturing supply chains, the real risk is not a single tariff move, but a sustained cycle of coercive measures and retaliation. Firms that diversify sourcing, build tariff resilience into contracts and hedge regulatory risk will be better positioned if this dispute drags on.