US tariffs have once again shaken relations between Europe and Washington following new threats linked to Greenland. The escalation has pushed the European Union to freeze a key trade agreement and prepare possible retaliatory measures.
Trade deal put on hold after new threats
The European Parliament has decided to suspend the approval process of the EU–US trade agreement reached politically last July. The move follows Washington’s threat to impose new tariffs on several European countries.
The deal still required parliamentary ratification to enter into force. However, key lawmakers argue that the renewed US tariffs undermine the spirit of the agreement negotiated last summer.
Under the deal, the United States would impose 15% tariffs on most European goods. In return, the EU committed to cutting tariffs on US industrial imports to zero.
Greenland emerges as the new flashpoint
Tensions intensified after President Donald Trump announced possible 10% tariffs starting in February. The measures would target countries including Denmark, Germany, France and Sweden.
Trump linked the removal of the tariffs to an agreement for the “complete and total purchase” of Greenland. The rate could rise to 25% by June if no deal is reached.
European lawmakers see the use of US tariffs as political pressure and a form of economic coercion. They also consider it a direct threat to the sovereignty of an EU member state.
Europe weighs retaliation
Following the threat of new US tariffs, Brussels has begun assessing possible countermeasures. The sanctions would affect countries that rejected Greenland’s annexation and sent military missions to the Arctic territory.
Among the options under discussion, three main paths stand out:
- Activating the “trade bazooka”, the informal name for the EU’s Anti-Coercion Instrument, adopted in 2023 and never used before. It would allow the bloc to impose broad trade barriers, restrict investment and limit access for US companies to the EU market.
- Imposing retaliatory tariffs, potentially covering up to €93 billion worth of US goods. The aim would be to pressure sectors with strong political influence in the United States.
- Suspending the EU–US trade agreement, signed in 2025 and still awaiting ratification.
France has called for a firm response, while other governments urge caution over the risk of escalation. EU leaders will discuss a coordinated strategy at a summit scheduled for January 22.
Markets on alert over trade war risks
The standoff has already impacted financial markets. European stock exchanges posted consecutive losses, while major US indices closed down more than 2%.
Fears of a renewed trade war add to broader global economic uncertainty. Analysts warn that a prolonged escalation could disrupt supply chains and investment flows.
The EU–US trade relationship accounts for nearly a third of global trade. In 2024, bilateral exchanges exceeded €1.6 trillion.
US tariffs have reignited a geopolitical conflict that goes beyond trade. Greenland has become the trigger for a new phase of tension between long-standing allies. Europe’s response will be crucial in determining whether the dispute escalates further.
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Sources
Genovese, V., & Corlin, P. (2026, 21 enero). Exclusive: EU lawmakers freeze EU-US trade deal after Trump tariff threat. Euronews. https://www.euronews.com/my-europe/2026/01/21/exclusive-eu-lawmakers-freeze-eu-us-trade-deal-after-trump-tariff-threat
Josephs, J. (2026, 21 enero). EU suspends approval of US trade deal. BBC News. https://www.bbc.com/news/articles/c4gwp2me3gzo
Parrock, J. (2026, 20 enero). Cómo responderá la UE al «chantaje» de Trump por Groenlandia. dw.com. https://www.dw.com/es/las-opciones-de-la-ue-contra-el-chantaje-de-estados-unidos-por-groenlandia/a-75584400
Tasr, E. W. A. A. B. B. C. D. E. S. P. (2026, 21 enero). EU mulls ‘trade bazooka’ amid standoff over US Greenland tariffs. European Newsroom. https://europeannewsroom.com/eu-mulls-trade-bazooka-amid-standoff-over-us-greenland-tariffs/
