Highlights

• European Parliament formally suspended the EU-U.S. trade pact agreed last July, citing Trump's tariff threats and pressure over Greenland as direct contradictions to the agreement's spirit.
• Greenland's strategic rare earth resources have transformed the dispute from a diplomatic spat to an industrial sovereignty red line, reframing the U.S. as a competitor rather than a partner.
• The suspension signals that sustained U.S.-European cooperation—not unilateral pressure—is the only viable path to counter China's dominance in critical minerals and rare earths.

---

Europe has slammed the brakes on a major EU–U.S. trade agreement—and Greenland is the flashpoint. On Wednesday, lawmakers in the European Parliament formally suspended approval of the EU–U.S. trade pact agreed last July, citing escalating tariff threats and renewed pressure from Donald Trump over Greenland. The move signals a sharp deterioration in transatlantic trust at precisely the moment the West needs tighter coordination to counter China’s rare earth dominance.

Bernd Lange, chair of the Parliament’s trade committee

Bernd Lange (opens in a new tab), chair of the Parliament’s trade committee (INTA), made the rationale explicit as captured by CNBC (opens in a new tab). Trump’s proposal to impose 10%–25% tariffs on European goods, coupled with public statements at the World Economic Forum suggesting the U.S. should “get Greenland as fast as possible,” directly contradicts the spirit—and likely the letter—of the trade deal. Until there is clarity on U.S. intentions toward Greenland, Lange said, the agreement is effectively on ice.

Why Greenland Changes Everything

This is not just a diplomatic spat. Greenland sits atop some of the world’s most strategically important undeveloped rare earth and critical mineral resources. Any perception of coercive U.S. behavior toward a territory linked to Europe via Denmark instantly reframes Washington not as a partner, but as a competitor.

For Europe, this triggers a red line: industrial sovereignty. For the U.S., it exposes a strategic contradiction—seeking to break China’s rare earth monopoly while alienating the very allies whose cooperation is essential to doing so.

Control vs. Collaboration

The Strategic Irony

Since our launch in late 2024, Rare Earth Exchanges™ has long argued that no single Western nation can replace China alone. The only viable path is a resilient U.S.–Europe-Australia partnership spanning mining, processing, magnet manufacturing, and defense supply chains. Tariffs and territorial pressure move in the opposite direction—fracturing alignment while Beijing watches quietly.

Markets may focus on whether Trump ruled out military action. Policymakers should focus on something deeper: Europe is seemingly signaling it will not trade economic integration for geopolitical intimidation.

Bottom Line

Does the European decision reflect not a warning shot, but a broader signal that securing long-term critical mineral resilience requires the United States to work with Europe as a co-equal strategic partner rather than relying on short-term transactional leverage?

At a time when China remains far ahead—highly organized and vertically integrated across the critical mineral and rare earth supply chain—is there a credible path to resilience that does not depend on deeper and tighter U.S.–European collaboration? Might Greenland be better understood not as a shortcut, but as a test of whether allied cooperation can be strengthened without straining transatlantic trust?

And over the long run, is sustained cooperation and industrial coordination—rather than unilateral pressure—the only durable way to build a meaningful alternative to China’s dominance in rare earths and critical minerals?