Global financial markets were on edge on Tuesday after reports that the European Parliament is preparing to suspend approval of a US–EU trade deal agreed last July, deepening tensions between Washington and Brussels and reviving fears of a wider trade war.
Sources close to the European Parliament’s international trade committee said the suspension is expected to be announced on Wednesday in Strasbourg, France. If confirmed, it would mark a significant escalation in the dispute, coming just days after US President Donald Trump threatened new tariffs amid renewed pressure over Greenland.
The standoff has unsettled investors, prompting fresh concerns about retaliation and a breakdown in transatlantic trade relations.
Stock markets on both sides of the Atlantic fell sharply. European equities recorded a second straight day of losses, while in the US the Dow Jones Industrial Average slid more than 1.7%. The S&P 500 dropped over 2%, and the Nasdaq ended the session around 2.4% lower.
Markets in the Asia-Pacific region were mixed on Wednesday. Shares in Japan and Australia edged lower, while indexes in Hong Kong and mainland China posted gains.
Safe-haven assets benefited from the uncertainty. Gold prices surged above $4,800 (£3,570) an ounce for the first time on record, extending strong gains over the past year. Silver prices eased slightly after retreating from a record high above $94 an ounce.
In currency markets, the US dollar was broadly steady against major peers after falling 0.5% overnight, its biggest single-day drop since early December.
Trade tensions had appeared to ease in July, when the US and EU struck a deal at Trump’s Turnberry golf course in Scotland. The agreement reduced proposed US tariffs on most European goods to 15%, down from an initially threatened 30% under Trump’s “Liberation Day” tariff plans announced in April. In return, Europe agreed to boost investment in the US and implement changes aimed at increasing American exports.
However, the deal still requires approval from the European Parliament to take effect.
That process was thrown into doubt over the weekend after Trump again raised the prospect of tariffs linked to Greenland. Manfred Weber, a senior German lawmaker and influential member of the European Parliament, said on Saturday that “approval is not possible at this stage.”
Bernd Lange, chair of the European Parliament’s international trade committee, went further, arguing that suspending the deal was unavoidable.
“By threatening the territorial integrity and sovereignty of an EU member state and by using tariffs as a coercive instrument, the US undermines the stability and predictability of EU–US trade relations,” Lange said.
“There is no alternative but to suspend work on the two Turnberry legislative proposals until the US decides to re-engage on a path of cooperation rather than confrontation.”
The committee’s approval is required before the agreement can proceed to a final parliamentary vote, leaving the future of the transatlantic trade deal increasingly uncertain as markets brace for further volatility.
