(Feb 23): The European Union froze ratification of its US trade deal until President Donald Trump solidifies his upended tariff plans, injecting economic turbulence into an already strained relationship.
EU lawmakers on Monday suspended legislative work on approving the deal. The move came days after the US Supreme Court struck down Trump’s use of an emergency-powers law to impose his so-called reciprocal tariffs around the world.
Both European stocks and the S&P 500 were down 0.3% as cautious investors assessed the latest developments.
“We want to have clarity about the situation,” European Parliament trade committee chair Bernd Lange said at a meeting on Monday. “We want to have clarity from the US that they are respecting the deal because that’s a crucial element.”
The fresh delay extends an already long road for the trade deal, which was reached last summer but has never been fully implemented. If the pact falls apart, it threatens to reopen a wound in a transatlantic relationship already suffering as Trump vacillates on Russia’s war in Ukraine, pushes to control Greenland and insults EU leaders.
“Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to,” Trump wrote Monday afternoon on Truth Social. “BUYER BEWARE!!!”
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But European officials want answers about Trump’s tariff strategy moving forward before making any decisions.
Within hours of Friday’s court ruling, Trump said he would impose a 10% global tariff — which he then increased to 15% — leaving many questions unanswered for American trading partners.
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Trump also said he would preserve existing duties imposed under Sections 301 and 232, and ordered the US trade representative to launch new Section 301 investigations on an accelerated timeline. Those probes require country-specific inquiries and findings of trade violations before tariffs can be imposed, and could eventually replace the baseline rate.
The remarks left it unclear how such efforts might intersect with existing trade deals.
The European Commission, which reached the initial deal with Trump as the EU’s executive arm, said it is trying to gather information from US officials.
“Full clarity on what these new developments mean for the EU-US trade relationship is the absolute minimum that is required for us as the EU to make a clear-eyed assessment to decide on the next steps,” Olof Gill, a commission spokesperson, told reporters on Monday. “More is required for us to understand the full picture here.”
The Group of Seven nations’ trade ministers also held a call Monday, where EU Trade Commissioner Maros Sefcovic said on X that he stressed “full respect” for the US trade deal “is paramount”. Later on Monday, EU ambassadors will meet to discuss the US trade relationship.
The latest trade upheaval comes at a raw moment for transatlantic ties, as Europe increasingly charts its own course away from the US.
The EU is striking economic deals with other partners and instituting policies favouring its own companies and defence manufacturers — angering Washington in the process. The US also accuses the bloc of imposing digital regulations tantamount to censorship.
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Even before Friday’s ruling, the US-EU trade deal had faced a rocky path to ratification.
Under the pact’s initial terms, the EU agreed to a 15% tariff rate on most of its exports to the US, while vowing to remove tariffs on American industrial goods heading into the bloc. The US also said it would keep a 50% tariff on European steel and aluminium imports.
The bloc struck to the lopsided deal in the hopes of avoiding a full-blown trade war with Washington and retaining US security backing, particularly on Ukraine.
Yet the US soon expanded its 50% metals tariff to hundreds of additional products, angering EU lawmakers and European officials. The European Parliament didn’t swiftly ratify the agreement, and it remained only partially implemented.
Trump’s Greenland threats then put further pressure on the deal, leading some to call for the deal to be cancelled.
While that didn’t happen, EU lawmakers did freeze the approval process, leaving the deal in peril. The bloc even considered imposing tariffs on €93 billion (US$110 billion or $138.93 billion) worth of US goods — a threat they had abandoned earlier after striking the US accord.
After Trump backed down over Greenland, however, parliament restarted its ratification work, aiming to fully approve the agreement in March. But in the process, lawmakers also introduced several changes, like a sunset clause, which would require further negotiations with EU capitals if parliament ultimately approves the deal.
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