In a stunning move, Trump on Wednesday halved the 20 percent tariff he announced on the EU on April 2, bringing it into line with a 10 percent universal tariff he has set for most countries. At the same time, he jacked up tariffs on China to 125 percent in an escalating tit-for-tat trade battle between the world’s two largest economies.
The resulting pause was discussed by EU ambassadors in an emergency meeting on Thursday morning, the day after member countries gave their overwhelming assent to counter measures on €21 billion in U.S. exports — ranging from agricultural and industrial commodities to cigarettes, ice cream and even yachts.
The tariffs would still start to be put in place from next week, as initially planned, but they would be suspended by a separate legal proposal to create room for negotiations with the White House, according to four diplomats who were granted anonymity to discuss the closed-door meeting.
Von der Leyen added: “If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.”
Relieving the pressure
Trump’s retreat relieved massive pressure on financial markets, triggering a double-digit rally in stocks and easing strains on the market for U.S. Treasury bonds that had threatened the stability of the global financial system. Still, U.S. tariffs remain higher than they have been in a century.
In a statement Thursday, Chinese foreign ministry spokesperson Lin Jian said: “The U.S. uses tariff as a weapon to exert maximum pressure for its own selfish gains, which severely hurts the legitimate rights and interests of all countries, violates the WTO rules, sabotages the rules-based multilateral trading regime, and destabilizes the global economic order.”