U.S. President Donald Trump has delayed the imposition of threatened 50% tariffs on European Union imports until July 9, giving both sides more time to negotiate a trade deal. The announcement came after a phone call with European Commission President Ursula von der Leyen, who requested the postponement to allow further discussions. Trump agreed to the delay, restoring the original deadline set in April.
The news triggered a positive response in European markets, with the euro rising to its highest level against the dollar since April and stock futures in Europe and Germany indicating gains of over 1.5%. This market rally reflects investor optimism that trade tensions might ease following the temporary tariff reprieve.
Trump had initially announced the tariffs would take effect June 1 due to frustration over stalled negotiations with the EU. His sudden threat unsettled global markets and added to ongoing trade disputes, but his softened stance now offers a temporary pause. Despite this, the volatility in his trade policies highlights the unpredictability faced by policymakers and investors.
Trade talks remain challenging, with the U.S. demanding unilateral concessions from the EU, while Brussels seeks a mutually beneficial agreement. The EU is already subject to 25% tariffs on steel, aluminum, and cars, and a 10% levy on most other goods, which could escalate to 50% if no deal is reached—potentially impacting prices on products like German cars.
This latest development comes amid broader tensions fueled by Trump’s “America First” agenda, which has strained relations with long-time allies over trade and security. While the U.S. has made progress in deals with Britain and held talks with China, a breakthrough with the European Union remains elusive, though both sides express readiness to continue discussions.
Source: Reuters