Europe to suspend approval of US tariffs deal

The European Parliament is preparing to temporarily suspend its approval process for the US tariffs agreement reached in July, according to sources familiar with discussions within its international trade committee.

The expected announcement, scheduled for Wednesday in Strasbourg, France, would signal a further intensification of transatlantic negotiations at a time when political and economic sensitivities are running high. While the move introduces uncertainty, European officials have framed it as a procedural step that keeps dialogue open rather than closing the door on cooperation.

The development comes against the backdrop of renewed political friction, as US President Donald Trump has escalated rhetoric over Greenland, warning over the weekend that additional tariffs could follow if US interests are not addressed. Despite the sharper tone, European diplomats continue to emphasise that engagement remains the preferred path forward.

Global financial markets have responded cautiously, reflecting heightened awareness of the potential for renewed trade disputes, but also the expectation that both sides have incentives to avoid a prolonged confrontation. European stock markets recorded a second consecutive day of declines on Tuesday, while US equities also eased. The Dow Jones Industrial Average fell 1.3% in midday trading, the S&P 500 slipped 1.5%, and the Nasdaq was down 1.7%.

Currency markets mirrored the shift in sentiment. The US dollar weakened notably, allowing the euro to rise 0.7% to $1.1731, while sterling gained 0.2% to trade at $1.346. Analysts noted that such movements often reflect short-term reassessments rather than long-term expectations.

Bond markets also saw increased activity, with borrowing costs rising globally as investors adjusted positions. Yields on 30-year government bonds climbed in major economies including the United States, the United Kingdom and Germany, marking the most significant sell-off in long-term debt for several months.

Until recently, trade relations between Washington and Brussels had shown signs of stabilisation following the July agreement reached at President Trump’s Turnberry golf course in Scotland. Under that deal, US tariffs on European goods were set at 15%, a notable reduction from the 30% initially threatened during April’s “Liberation Day” tariff announcements.

In return, the European Union committed to increased investment in the United States and to regulatory and structural adjustments within Europe aimed at supporting stronger US export growth. Officials on both sides had presented the arrangement as a balanced compromise designed to restore predictability to transatlantic trade.