The European Parliament has suspended legislative work on a trade agreement with the United States, effective Monday, pending clarification regarding new U.S. Customs tariffs. The move, initiated by major political groups within the Parliament, comes after the U.S. Supreme Court invalidated the legal basis for tariffs imposed by the Trump administration, prompting former President Trump to signal potential increases to 10% and then 15%.
The agreement, initially reached in July 2025 between then-President Trump and European Commission President Ursula von der Leyen, was already considered unfavorable to the EU, stipulating a 15% tariff on most EU exports to the U.S. Whereas allowing duty-free access for U.S. Industrial goods to the European market. Brussels accepted these “asymmetric” terms in an effort to avoid a broader trade war and secure continued U.S. Security support for Ukraine, according to sources familiar with the negotiations.
The U.S. Supreme Court’s decision to strike down the “emergency authorities” law used by Trump to enact the tariffs threw the agreement into uncertainty. Bernd Lange, Chairman of the European Parliament’s International Trade Committee, convened an emergency meeting to assess the situation. Zeljana Zovko, the lead negotiator for the European People’s Party (EPP), the Parliament’s largest political bloc, stated, “We have no choice but to postpone the process until the situation becomes clear.”
The suspension of the ratification process was announced by the EPP, the Socialists and Democrats (S&D), and Renew Europe groups, representing a significant majority within the Parliament. Manfred Weber, President of the EPP, indicated that the agreement’s approval was “impossible” given Trump’s threats regarding Greenland and the imposition of additional tariffs on eight European nations. Iratxe Garcia-Perez, President of the S&D, condemned Trump’s actions as “unacceptable” and called for the EU to suspend trade negotiations and activate its own trade defense mechanisms.
The decision has contributed to volatility in global markets. The move coincided with a sell-off in Wall Street futures and a decline in the dollar index, as investors began pricing in a higher “risk premium” for U.S. Assets. Demand for gold, a traditional safe-haven asset, also increased.
The European Parliament’s International Trade Committee has indefinitely frozen all work related to the EU-U.S. Trade agreement, citing concerns over sovereignty and territorial integrity. No timeline for resuming discussions has been established, and the U.S. Administration has yet to issue a formal response to the Parliament’s decision.
