Trump's new setback: he postpones tariffs and continues negotiations with the EU

Washington/BrusselsDonald Trump's moves are similar with all the powers with which he has started a trade war. He threatens a large tariff increase and then backtracks, claiming he has achieved compensation, although he maintains part of the tariff increase he had initially announced. First, this happened with China and the United Kingdom, and now history is repeating itself with the European Union. After threatening Brussels again on Friday with an increase in import taxes of up to 50% starting June 1, this Monday he called Ursula von der Leyen and they announced that they will at least postpone the tariffs until July 9. Previously, Trump also partially froze the 20% general tariffs on European products for 90 days.

"I received a call from Ursula von der Leyen, the President of the European Commission, requesting an extension of the 50% tax deadline for trade with the European Union. I have agreed to extend it to July 9, 2025," Trump wrote on Truth Social. Hours before Trump confirmed it, Von der Leyen had announced the call and the extension of the deadline. "Europe is ready to move forward in talks calmly and decisively. To reach a good agreement, we will need until July 9th," the president of the European Commission wrote in a post on X.

Following this call, Brussels also announced that Trade Commissioner Maroš Šefčovič and his counterpart would hold a telephone conversation on Monday. "The European Commission remains fully engaged in constructive efforts towards an agreement. We remain in constant contact," the EU Trade Minister tweeted.

They already called each other last Friday, and despite the fact that Trump had attacked the EU just hours before, Šefčovič confirmed the EU's "commitment" to reaching a trade agreement. However, he criticized the fact that negotiations between the two sides have been interrupted by "threats." Furthermore, a delegation of MEPs is also scheduled to travel to Washington this week to discuss the trade war with US officials.

In fact, Trump took the EU by surprise with the 50% announcement, as they were currently enjoying a 90-day partial truce (which ended in July) on reciprocal tariffs within the EU. The pause has temporarily lowered taxes from 20% to 10%. In his Friday announcement, the US president once again attacked the European Union and reiterated that it was created "with the primary purpose of taking advantage of the United States." He also criticized, once again, value-added taxes (VAT) as a "major trade barrier," calling EU regulations "unfair and unfounded," and the sanctions that Brussels and the European courts have imposed on some major American companies, such as technology companies, "ridiculous."

Trump not only uses tariffs to dictate economic policies, but also to obtain other concessions that go beyond markets. China's initial reaction was not to flinch and to counterattack with reciprocal tariffs, until Trump began to tone things down. At the beginning of the month, delegations from both countries met in Switzerland to begin talks.

However, Brussels' strategy in the face of Trump's constant threats is different from Beijing's. The European Commission has always opted for predictability and to maintain a diplomatic and unified tone to reach a trade agreement with Washington. However, it has also been preparing measures and tariffs to counter a potential escalation of the conflict by the White House. Currently, for example, the EU has frozen a list of products it could quickly implement tariffs of 25% and is preparing another one in case the US permanently remove the additional 10% tariff on European imports approved by Trump.

All in all, Brussels and EU member states are increasingly optimistic about the trade war, especially after the agreements signed between the United States and the United Kingdom, and China. In fact, the vast majority of European partners saw these understandings as a sign of a de-escalation of the trade war initiated by Washington. For example, Spanish Economy Minister Carlos Cuerpo told the media in Madrid that they support the European Commission in its policy of "maintaining an open relationship and dialogue" with the White House to try to reach an agreement with the Trump administration.