The European Union will suspend its first countermeasures against US tariffs for 90 days, European Commission President Ursula von der Leyen said on Thursday. The day before, President Donald Trump suspended the introduction of retaliatory tariffs for the next 90 days, citing new negotiations with foreign states on trade issues.
The EU was set to impose counter-tariffs on 21 billion euros of American imports next Tuesday in response to Trump's 25-percent tariffs on steel and aluminum. «We want to give negotiations a chance. Although the approval procedure for the EU's retaliatory measures, which received broad support among member states, is nearing completion, we are suspending them for 90 days. If the results of the negotiations do not satisfy us, these measures will come into force», wrote Ursula von der Leyen on social media X.
Polish Prime Minister Donald Tusk urged to «make the most of these 90 days», while Spanish Prime Minister Pedro Sanchez expressed hope that the pause in tariffs «opens the door to negotiations and possibly an agreement between countries».
The decision to suspend the already imposed tariffs less than 24 hours after they took effect followed the strongest bout of volatility in financial markets in recent years. American stock indices soared on this news, and cautious optimism appeared in Asian and European trading on Thursday.
Donald Trump's comments on social media appeared at least imprudent. «Stay calm», Trump told his followers on social media on Wednesday morning after the markets opened. Just a couple of minutes later, he wrote: «Now is the perfect time to buy!» A few hours after this, Trump sent the markets soaring when he suspended the introduction of tariffs for 90 days. Within minutes, the S&P 500 index rose by several percentage points, marking the best day since the financial crisis of 2008.
As The New York Times writes, Democrats and government ethics experts asked the obvious question: did Trump give his followers the green light to profit from the upcoming rise in stock prices?
«How is this not market manipulation?» wrote Democrat Mike Levin on social media. — «If you are a Trump supporter and did what he said, bought, then you did great. On the other hand, if you are a retiree, an elderly person, or someone from the middle class who wasn't ready to take risks in recent days and decided to sell, then you got caught in a trap». There were also more categorical questions, such as which billionaires got even richer through insider trading?
Kathleen Clark, a professor specializing in government ethics and corruption at Washington University's School of Law in St. Louis, believes that Trump's actions «would typically trigger an investigation by the Securities and Exchange Commission», writes NYT. «If we still had the rule of law, a robust rule of law system, this would be investigated», she said.
After the ultimatum and the exchange of tariffs, which raised tariffs on Chinese goods to 125%, Trump continued to pressure China, receiving a similarly firm stance in return.
Ministry of Commerce representative He Yuncian stated at a regular press briefing that China would «see it through to the end» if the US persisted. China's doors are open for dialogue, but it must be based on mutual respect, the ministry stated.
«Trade wars have no winners. We do not want to wage them, but we are not afraid. We will not allow the legitimate rights of the Chinese people to be violated», said Chinese Foreign Ministry spokesperson Lin Jian.
On Thursday, the Chinese yuan reached its lowest level against the dollar since the global financial crisis. Meanwhile, oil prices fell by 2% as concerns about the deepening trade war between the US and China and a possible recession overshadowed the previous relief caused by Trump's announcement of a pause. Some central bank representatives also remained cautious.
As NYT writes, trading on Wall Street began gloomier than many expected, based on the optimism of other markets, such as in Europe, where stocks rose by almost 5%, and in Asia, where the Japanese Nikkei index rose by 9%.
S&P fell by almost 3%, indicating that investors may be taking a breather from the strong price fluctuations — and policy changes — over the past 24 hours to regroup.
As Reuters writes, the pause on tariffs is not absolute. The US will still impose a blanket «Trump» tariff of 10% on all imports. Exceptions are made for microchips, copper, timber, pharmaceuticals, precious metals, energy resources, and mineral resources not extracted in the US.
The suspension also does not affect tariffs on cars, steel, and aluminum. Yesterday's decision does not apply to tariffs for Canada and Mexico, as their goods are still subject to 25-percent tariffs on fentanyl if they do not meet the rules of origin established in the trade agreement between the US, Mexico, and Canada.
Photo: Reuters