In a dramatic shift, President Donald Trump’s surprise decision to pause most of the sweeping new tariffs he had just imposed—less than 24 hours earlier—has prompted the European Union to delay its own retaliatory measures, marking a temporary de-escalation in the growing global trade standoff.
European Commission President Ursula von der Leyen announced that the EU would hold off on counter-tariffs worth €21 billion ($23.25 billion) that were scheduled to take effect next week, saying:
“We want to give negotiations a chance… we will put them on hold for 90 days.”
These measures had been prepared in response to Trump’s 25% tariffs on steel and aluminum from several countries, including key EU member states. The bloc is still evaluating its response to the 10% blanket duties and auto tariffs that remain in place.
Trump’s abrupt reversal on Wednesday night followed a period of intense market turmoil:
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Trillions of dollars were wiped off global stock markets.
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US government bond yields surged, unsettling investors and likely catching Trump’s attention.
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Major US indexes rebounded sharply once the pause was announced, with the rally extending into Asian and European markets.
However, while Trump dialed back tariffs for more than 75 countries, China was excluded from the reprieve. Instead, Trump escalated pressure on Beijing, raising tariffs on Chinese imports from 104% to a staggering 125%, and signing an executive order aimed at curbing China’s dominance in the shipping industry while trying to revive US shipbuilding.
In response, China dismissed the move as blackmail, with its Commerce Ministry warning that it would "follow through to the end" if provoked. On Wednesday, Beijing had imposed 84% tariffs on US goods, and may retaliate further. The Chinese yuan fell to its lowest level against the dollar since the global financial crisis, underscoring market fears.
While Trump maintained that a resolution with China is possible, he suggested the US would prioritize talks with other trade partners such as Japan, Vietnam, and South Korea, all eager to negotiate new terms.
Meanwhile, the EU welcomed the pause but made it clear that the counter-tariffs could return swiftly:
“If negotiations are not satisfactory, our countermeasures will kick in… all options remain on the table,” von der Leyen warned.
She emphasized that the move could help stabilize the global economy, at least temporarily. But lingering uncertainty remains, particularly because:
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A 10% blanket tariff on nearly all US imports is still active.
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Duties on steel, aluminum, and autos are still in force.
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Canada and Mexico remain subject to 25% tariffs over fentanyl-related compliance issues under the USMCA.
The EU’s now-suspended countermeasures had included tariffs on maize, wheat, motorcycles, poultry, fruit, and clothing—goods chosen to target key US industries and political constituencies.
Elsewhere, India has expressed interest in fast-tracking trade talks with Washington in light of the shifting tariff environment.
Despite some optimism, central bankers and economists remain wary. ECB policymaker François Villeroy de Galhau called the situation "less bad news," but stressed that continued volatility and unpredictability threaten economic trust and growth.
As Trump put it himself:
“You have to be flexible.”
For now, the world watches as the clock ticks on a 90-day negotiation window—a high-stakes pause in a global trade war that still simmers just below the surface.
