Wed, 21 Jan 2026

Wed, 21 Jan 2026 Global markets on alert as Europe to suspend approval of US trade deal

The move follows renewed tensions between the US and EU, as Donald Trump pushes to acquire Greenland.
The move would mark another escalation in tensions between the two sides and could lead to retaliatory measures against the US for its trade policies. Financial markets have been affected by the stand-off, with European stock markets experiencing losses on Tuesday and the US Dow Jones index dropping 1.7% and the S&P 500 by over 2%. The price of gold has risen above $4,800 an ounce as investors seek safer assets during times of uncertainty. Trade tensions between the US and Europe had eased after a deal was struck at Trump's Turnberry golf course in Scotland in July, but approval from the European Parliament is still required for it to become official. Influential German member Manfred Weber has said that "approval is not possible at this stage" due to the threats over Greenland, while Bernd Lange, who chairs the European Parliament's committee on international trade, says there is "no alternative" but to suspend work on the deal. The EU had previously announced a €93bn ($109bn) worth of American goods that could be hit with levies in response to Trump's tariffs before putting the plan on hold while the two sides finalised details of a deal. French President Emmanuel Macron is among those urging the EU to consider its retaliatory options, including an anti-coercion instrument nicknamed a "trade bazooka". US Treasury Secretary Scott Bessent has urged European leaders not to retaliate against US tariffs, saying it would be a mistake. The US and the 27-nation European Union are each others' single biggest trade partners, with more than €1.6tn ($1.9tn) in goods and services exchanged in 2024. Only China and Canada stuck by their threats to hit American goods with tariffs after Trump announced them last year, with Canada quietly withdrawing most of those measures in September. The pending Supreme Court decision over whether many of the tariffs are legal looms in the background of the trade tensions.
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