The European Union will suspend for 90 days its countermeasures against the U.S. in response to President Donald Trump’s steel and aluminum tariffs, to buy time to negotiate a trade deal, Ursula von der Leyen said Thursday.
The European Commission president announced the concession after Trump pulled a U-turn on Wednesday on the punishing “reciprocal” tariffs he announced on “Liberation Day” just over a week ago.
“We want to give negotiations a chance,” von der Leyen said in a social media post. “While finalising the adoption of the EU countermeasures that saw strong support from our Member States, we will put them on hold for 90 days.”
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.
See also: EU imposes 25% tariffs on U.S. goods
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.”
full article: politico.eu
Trump blinked. US Bonds took a big hit. Nobody wants US debt. The world sent a big message to America.
Trump has now 90 days to develop plan B. Or that is just a distraction. The EU and the world should prepare for more American backstabbing.
Standard progression:
1 It starts with a currency war where each country tries to devalue it currency relative to others to gain an advantage on exports. It fails. We have been in this phase for some time.
2 It progresses to a trade war. We are entering this phase now.
3 It ends in a hot war.
The timing of the transition from 2 to 3 is uncertain.