Trump Delays Tariffs on the EU, Global Markets Take a Breather in Negotiation Window
On June 1, which was supposed to be the critical point for the resurgence of the US-EU trade war, a phone call from Trump changed everything.
Facing the threat of a 50% tariff on EU goods set to take effect on June 1, Trump announced after communicating with European Commission President Ursula von der Leyen that the tariffs would be postponed until July 9, giving negotiations a 'last chance'.
This is not weakness, but rather an art of control in the game of negotiations.
Trump's long-standing dissatisfaction with the EU is well-known. From tariff barriers to trade deficits, the US has always believed that the EU has 'gained the upper hand' in economic and trade relations. The 50% tariff was originally Trump’s usual tactic of 'maximum pressure' to push for a deal.
However, the EU is not to be underestimated. The EU has already prepared €21 billion in retaliatory tariffs, with a clear bottom line: no agreement can be reached under threat.
When Trump publicly stated that 'the call with von der Leyen was very pleasant' and took the initiative to postpone tariffs, he was actually sending two signals:
1. The Trump administration is not in a hurry to start a trade war but rather hopes to achieve a balance between political and economic interests.
2. The EU still has room for maneuver, but must come up with substantial concessions or cooperation proposals before July 9, otherwise conflict may reignite.
This 'breathing window' is undoubtedly positive for the markets.
The EU is the second-largest economic entity in the world, and if a trade war breaks out, it will impact key sectors such as energy, technology, automotive, and agriculture. Against the backdrop of tightening Fed monetary policy and weakening global economic expectations, any trade conflict could become the last straw that breaks the market's back.
In the coming weeks, high-level negotiations between the US and EU will become the focus of global political and economic attention. If you are an investor, now is a crucial moment to closely observe and seize strategic opportunities amid changing circumstances.
The outcome is uncertain, but the situation has already shifted.
July 9 will be a true watershed moment determining the next phase of global capital sentiment.
