Washington (Brussels Morning Newspaper) – US President Donald Trump has retreated from his pledge to impose a 50% tariff on imports from the EU scheduled for next month. He has reinstated the July 9 deadline to facilitate negotiations between the US and Brussels aimed at reaching an agreement.
As reported by Reuters, EU assets experienced a rally on Monday. The euro reached its highest point against the dollar since April 30, and European shares surged, set to recover losses from the previous session.
A day earlier, On Friday, the US President announced his recommendation for a 50% tariff starting June 1, citing frustration over the slow pace of trade negotiations with the European Union. This announcement unsettled global financial markets and escalated a trade war characterised by constant shifts in tariff policies toward Washington’s trading partners and allies.
The US President, who has frequently voiced his discontent with the European Union and its trade practices regarding the US, conceded after EU Commission President Ursula von der Leyen informed him on Sunday that the European Union required additional time to finalise a consensus.
What did von der Leyen request from Trump?
Donald Trump mentioned that he and the EU executive had a “very nice call” which resulted in the delay.
“The president of the EU Commission expressed her desire to engage in serious negotiations,”
he told reporters at Morristown Municipal Airport in New Jersey.
“She requested July 9 as the date. Can we shift it from June 1 to July 9? I agreed to that arrangement.”
Trump also mentioned,
“She said we will quickly gather and explore possible solutions.”
The president of the EU Commission stated in a post on X that she had a “good call” with the US president and that the EU was prepared to act swiftly.
“Europe is prepared to move forward with discussions promptly and decisively,”
she stated.
“To secure a favourable agreement, we will require time until July 9.”
How did global markets react to the extension?
After the announcement of the delay, stock markets saw slight increases on Monday.
The pan-European STOXX 600 index increased by 1% by 0710 GMT after the deadline in Washington was extended. The benchmark had fallen by 0.9% on Friday, following an unexpected request from the US president for higher tariffs on European products.
The motorcars and parts index, vulnerable to tariff tensions, increased by 1.4%. Luxury stocks, significantly affected by the US market, also rose, along with banks.
In early trading, Tokyo’s benchmark Nikkei 225 increased by as much as 0.8%, while South Korea’s KOSPI saw a gain of 0.9%. Meanwhile, Beijing’s Shanghai Composite Index rose by 0.3%. Taiwan’s TAIEX and Australia’s S&P/ASX 200 remained mostly stable, whereas Hong Kong’s Hang Seng Index dropped by 0.3%.
