Europe's firm response to the US and the frozen trade agreement with the US have drawn attention.

Europe finally stood up to the US! Europe is retaliating against the US. On January 21, according to AFP, in response to the US threatening to impose tariffs on Europe over the Greenland issue, Europe formally retaliated. The European Parliament froze the approval process of the trade agreement reached between the EU and the US in July last year. What does it mean for Europe to initiate this freezing procedure? It means that the tariff terms agreed upon between Europe and the US will not take effect.

In fact, the agreement was clearly one-sided in favor of the US. After being frozen, products exported from the US to the EU will no longer be eligible for tariff-free treatment. The EU will continue to maintain the original tariffs on imports from the US. Put simply, the US-EU tariff negotiations have returned to square one. Although the European Parliament still needs to hold a formal vote on this, given that major political groups have reached an agreement, it is almost certain that the agreement will be frozen.

Evidently, the US probably did not expect Europe to stand firm this time. In fact, just before Europe was about to freeze the agreement, US Treasury Secretary Bensinger warned Europe, saying, "I call on everyone here to stay calm, take a deep breath, and observe the situation. I urge all countries to adhere to their trade agreements." But obviously, Bensinger's warning had no effect. In fact, at the ongoing Davos Forum, French President Macron and European Commission President von der Leyen openly expressed dissatisfaction with the US.

Now that Europe has taken action, it's up to the US to respond. If the US continues to adopt a hardline approach towards Europe, Europe will definitely freeze the agreement, and could also impose tariffs on $93 billion worth of American goods, or sell US treasury bonds as options. Evidently, Europe seems to have no intention of making concessions to the US. If the situation develops in this direction, the US domestic bond market, stock market, and foreign exchange market are likely to experience severe volatility.

Original article: toutiao.com/article/1854884952186890/

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