Trump holds off on 50pc tariff on EU goods, extends pause to July 9

WASHINGTON, UNITED STATES: US President Donald Trump said he would extend the deadline for the European Union to face 50 percent tariff until July 9 after after a phone call with Commission President Ursula von der Leyen.

“We had a very nice call and I agreed to move it,” Trump told reporters Sunday at Morristown Airport in New Jersey on his way back to Washington.

Von der Leyen, who heads the EU’s executive arm, said earlier Sunday in a post on X that “Europe is ready to advance talks swiftly and decisively,” but “a good deal” will need time until July 9. That’s the date that Trump’s 90-day pause of his so-called reciprocal tariffs had originally been set to end.

The EU had been slated for a 20 percent tariff under those reciprocal rates announced in April, and a temporary pause took the rate down to 10 percent through July 9.

But Trump on Friday threatened to impose a higher, 50 percent tariff on the EU starting June 1, after complaining the bloc  was slow walking negotiations and unfairly targeting US companies with lawsuits and regulations.

US and European equity-index futures climbed along with Asian stocks on Monday. The dollar fluctuation after falling to its lowest level since December 2023.

The EU has been struggling to understand what Trump is looking for in trade negotiations. Officials have suggested that the EU and US could take their tariffs down to zero on many goods, but Trump has been focused on what he call non-tariff trade barriers.

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Deputy Treasury Secretary Michael Faulkender said on Fox News’ Sunday Morning Futures hours earlier that the US faces a “simultaneous challenge” of negotiating with the EU as a bloc on tariffs while also seeking to address most of those non-tariff barriers in talks with individual European nations, creating a “negotiation problem.”

The EU last week shared a revived trade proposal with the US in a bid to boost talks, and the bloc’s trade chief Maros Sefcovic, held a call with his US counterpart, Jamieson Greer, on Friday.

The new EU framework covers tariffs and non-tariff barriers, as well as ways to enhance economic security, mutual investments, strategic purchases and cooperation on global challenges.

Trump’s 50 percent tariff threat would hit $321 billion worth of US-EU goods trade, lowering US gross domestic product by close to 0.6 percent and boosting prices by more than 0.3 percent, according to Bloomberg calculations.

Trump has said he wants to use tariffs to encourage companies to build plants in the US rather than overseas to manufacture goods. On the same day, he announced the 50 percent EU tariff threat, he also threatened 25 percent tariffs on smartphones made abroad by companies like Apple Inc. and Samsung Electronics Co.