The European Parliament is planning to suspend approval of the US trade deal, according to reports.
The deal, which was originally agreed in July, will be formally suspended in an announcement in Strasbourg today, the BBC reports.
It comes amid rising tensions between the US and Europe as Donald Trump continues to push to acquire Greenland.
Global markets are on high alert ahead of the announcement, with shares on both sides of the Atlantic lower on Tuesday, with European stock markets seeing a second day of losses. In the US, the Dow Jones dropped more than 1.7%, while the S&P 500 fell more than 2% and the Nasdaq closed about 2.4% lower.
Safe haven precious metals like gold continue to thrive amid the turbulence, reaching in excess of £3,570 per ounce for the first time.
The US and Europe had struck a trade deal in Scotland in July, but it still needs approval from the European Parliament before becoming official.
But over the weekend, within hours of Trump's comments about Greenland, Manfred Weber, an influential German member of European Parliament, said "approval is not possible at this stage".
The chair of the European Parliament's international trade committee, Bernd Lange, agreed there was "no alternative" but to suspend the deal.
He said: "By threatening the territorial integrity and sovereignty of an EU member state and by using tariffs as a coercive instrument, the US undermines the stability and predictability of EU–US trade relations.
"There is no alternative but to suspend work on the two Turnberry legislative proposals until the US decides to re-engage on a path of cooperation rather than confrontation, and before any further steps are taken."