The European Union has decided to hold off on launching its planned countermeasures against U.S. tariffs after President Donald Trump unexpectedly rolled back most of the steep duties he had imposed just a day earlier. European Commission President Ursula von der Leyen confirmed the pause on Thursday, signaling a temporary opening for diplomatic dialogue.
The Trump administration is currently reviewing tariff proposals from more than a dozen countries, with some deals reportedly nearing completion, according to White House economic adviser Kevin Hassett.
“We’ve got about 15 countries that have submitted concrete offers,” Hassett told reporters, referring to updates from the U.S. Trade Representative. He added that senior officials would meet Thursday to decide which trade talks to prioritize.
The EU had been set to impose retaliatory tariffs on roughly €21 billion ($23.25 billion) of American goods starting next Tuesday in response to the U.S.’s 25% tariffs on steel and aluminum. While those EU countermeasures have been finalized, von der Leyen said the bloc would delay their implementation for 90 days in hopes of making progress at the negotiating table.
“We want to give negotiations a chance,” she said in a post on X. “Though the EU stands ready to act, we will put our measures on hold temporarily.”
Trump’s rapid shift in policy—rolling back tariffs within 24 hours of implementing them—sparked a wave of relief across global markets, which had been rocked by one of the most volatile episodes since the early days of the COVID-19 pandemic. U.S. stocks surged on the news, and the rally extended into European and Asian markets on Thursday.
Before the reversal, financial markets had lost trillions in value, and surging U.S. bond yields added to the turmoil, likely prompting a White House rethink.
U.S.-China Trade Clash Intensifies
While Trump has eased tensions with allies, he doubled down on his trade fight with China. On Wednesday, the U.S. hiked tariffs on Chinese imports to 125%, up from 104%, and Trump signed an executive order aimed at curbing China’s influence in the global shipping industry while boosting U.S. shipbuilding.
In response, China condemned what it called “threats and blackmail.” Commerce Ministry spokesperson He Yongqian said Beijing remains open to dialogue but warned any talks must be grounded in mutual respect. China has already retaliated with an 84% tariff on U.S. imports and may take further action if tensions escalate.
Despite the aggressive moves, Trump left the door open for a potential trade deal with China. However, U.S. officials say the focus for now is on finalizing agreements with countries like Japan, South Korea, and Vietnam, which are lining up to negotiate exemptions or revised trade terms.
China’s yuan, under pressure from the growing uncertainty, hit its lowest level against the U.S. dollar since the global financial crisis.
Europe Holds Fire—For Now
In Europe, markets responded positively to the pause. Government bond yields rose, spreads narrowed, and expectations for European Central Bank rate cuts eased. Stocks across the region rallied.
Von der Leyen called Trump’s reversal an important step toward restoring global economic stability, but she emphasized the EU remains prepared to act if talks stall.
“If negotiations are not satisfactory, our countermeasures will kick in,” she warned. “Preparatory work on additional measures continues. As I’ve said before, all options remain on the table.”
It’s worth noting that Trump’s rollback doesn’t undo all the tariffs. A blanket 10% duty on most U.S. imports remains, and tariffs on steel, aluminum, and autos are still in place. Additionally, goods from Canada and Mexico are still subject to a 25% fentanyl-related tariff unless they meet the rules of origin under the U.S.-Mexico-Canada Agreement (USMCA).
UNCERTAINTY AND CONCERNS
