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President Donald Trump\u2019s economic threats on the European Union over acquiring Greenland amount to a \u201cmistake\u201d that violates a trade arrangement forged last year between the transatlantic allies, the bloc\u2019s executive said.<\/p>\n
\u201cThe European Union and the United States have agreed to a trade deal last July,\u201d European Commission President Ursula von der Leyen said in a speech to the World Economic Forum in Davos, Switzerland, on Tuesday. \u201cIn politics as in business, a deal is a deal. And when friends shake hands, it must mean something.\u201d<\/p>\n
Trump announced a 10% tariff on goods from eight European countries beginning Feb. 1, rising to 25% in June, unless he has a deal for the \u201cpurchase of Greenland,\u201d a semi-autonomous territory of Denmark, a NATO-ally and EU member. The escalation prompted European leaders to decry that the US leader has crossed a red line.<\/p>\n
The bloc\u2019s response will be \u201cunflinching, united and proportional,\u201d von der Leyen said, without offering details about what form a response would take.<\/p>\n
EU leaders will hold an emergency meeting in Brussels Thursday to explore potential retaliatory measures. European Council President Antonio Costa said the 27-member bloc was united in support of Denmark and Greenland \u2014 and ready \u201cto defend ourselves against any form of coercion.\u201d<\/p>\n
During a meeting Sunday, EU envoys agreed to seek a diplomatic resolution with the Trump administration while the bloc sets up options to retaliate if the US presses ahead with fresh duties, viewed as a breach of the fragile trade agreement between the US and EU last summer.<\/p>\n
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Lambasted by critics as offering excessive concessions to the US, the agreement set a 15% US tariff for most EU goods in exchange for a pledge by the EU to eliminate duties on US industrial goods and some agricultural products.<\/p>\n
Von der Leyen, who oversees trade negotiations for the EU, forged the deal in the hopes of avoiding a full-blown trade war with Trump. The agreement now faces an uncertain future after leaders in the European Parliament said they would put the legislation on hold after Trump\u2019s latest volley.<\/p>\n
The measures now being considered include reactivating duties on \u20ac93 billion ($109 billion) worth of US goods, including Boeing Co. planes, cars and bourbon. The tariffs were suspended last summer before the trade deal was fleshed out at the end of July.<\/p>\n
The EU is also considering enforcing its yet-unused anti-coercion instrument, the EU\u2019s most powerful trade tool, which allows the commission to respond to coercive actions from third countries exploiting trade measures to pressure the bloc.<\/p>\n
Measures could include tariffs, fees or targeted curbs on investments in the EU. They could also involve limiting access to certain parts of the EU\u2019s vast market or restricting firms from bidding for public contracts in bloc.<\/p>\n
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In order to support Greenland, von der Leyen said that authorities are working on a support package including a \u201cmassive European investment surge.\u201d She said the EU will also work with the US and other partners on Arctic security more broadly, which will be also reflected in the new EU security strategy.<\/p>\n
\u201cI believe we should use our defense spending surge on a European icebreaker capability and other equipment vital to Arctic security,\u201d she told attendants in Davos.<\/p>\n
Trump also sparked fears among European allies over his attempts to set up a Board of Peace initially set up for Gaza, but now viewed as an attempt to circumvent the United Nations \u2014 with an entry fee of $1 billion. EU leaders including French President Emmanuel Macron have declined to attend the launch ceremony.<\/p>\n
In response to the French president\u2019s snub, Trump said he would impose a \u201c200% tariff on his wines and champagnes and he\u2019ll join.\u201d<\/p>\n
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