Europe to suspend approval of US trade deal as global markets fall

The European Parliament is set to halt the approval of the US trade agreement reached in July, according to sources familiar with its international trade committee. This announcement will take place in Strasbourg, France on Wednesday. This decision could heighten the ongoing tensions between the US and Europe, especially as Donald Trump intensifies his pursuit of acquiring Greenland, which he hinted could lead to new tariffs over the weekend. This situation has unsettled financial markets, sparking discussions of a potential trade war and possible retaliation from Europe against US trade policies. On Tuesday, stock markets on both sides of the Atlantic declined, marking a second consecutive day of losses for European markets. In the US, the Dow Jones dropped more than 1.7%, the S&P 500 fell over 2%, and the Nasdaq closed down about 2.4%. The US dollar also experienced a significant decline in currency markets. The euro rose more than 0.8% against the dollar to $1.1749 before retreating, while the British pound increased before finishing the day up 0.1% at $1.343. Global borrowing costs rose as well, driven by the largest sell-off of long-term government bonds in months, which pushed yields on 30-year bonds higher in markets such as the US, UK, and Germany. Trade tensions between the US and Europe had calmed since an agreement was made at Trump’s Turnberry golf course in Scotland in July. This deal reduced US tariffs on most European goods to 15%, down from the 30% that Trump had initially threatened during his “Liberation Day” tariff wave in April. In return, Europe committed to investing in the US and making changes on the continent that were expected to enhance US exports.