Trump grants EU postponement on threatened new tariffs

US President Donald Trump wants to postpone the introduction of the new tariffs on imports from the EU, which he announced for the beginning of June, by a good month to allow more time for negotiations.

Trump announced that the start of the additional import duties of 50 percent would be postponed to July 9, after a conversation with European Commission President Ursula von der Leyen. He wrote on his online platform Truth Social that she had assured him that the necessary talks would start quickly.

Immediately before Trump's announcement, von der Leyen wrote on the X platform that the European Union and the US shared one of the most important and closest trade relationships worldwide. She wrote that Europe was ready to push ahead with talks quickly and decisively. She added that time was needed until July 9. That date marked the expiry of a postponement set by Trump in April for other tariffs he had announced. At that time, he had suspended new tariffs on imports from all over the world for 90 days after major turbulence on the stock and financial markets.

This window was to be used for negotiations. At that time, the EU had also announced that it would suspend planned retaliatory tariffs on US products for three months for the time being.

Trump’s surprising tariff announcement before weekend

On Friday, however, Trump surprisingly threatened the EU with punitive tariffs of 50 percent from June 1, and showed little willingness to compromise. Trump said at the White House that he was not looking for a deal. He justified the drastic step with deadlocked negotiations.

The Dax fell to its lowest level in two weeks. European products, for example from Germany, would probably be significantly more expensive in the US if the high punitive tariffs were actually to come into force.

Despite Trump's assurances, however, it seemed unclear whether the new punitive duties on imports from the EU would come into force as announced at such short notice. In the past, Trump has regularly threatened high tariffs - and then subsequently reversed course. The Republican sometimes uses his tariff threats as a negotiating tactic.

Only recently, the US concluded a trade pact with the UK to avert high tariffs. The US government has also negotiated a reduction in mutual tariffs with China.

Possible proposals to resolve tariff dispute

To defuse the current trade dispute, the EU has already offered the US an agreement on the mutual abolition of all tariffs on industrial goods. However, the Trump administration has not yet agreed to this. In addition to tariff deals, new agreements are an option. According to the EU Commission, the EU and Trump could conclude a new deal to expand American exports of liquefied natural gas (LNG). In addition, it would be possible to import more military technology and agricultural goods in order to reduce the US trade deficit with the EU.

The EU sees Trump's tariffs as unjustified and incompatible with the rules of the World Trade Organization (WTO). It stresses that it will introduce decisive measures against US tariffs should the negotiations fail. These are to include retaliatory tariffs.

Trump sees EU as vehicle to harm US

Trump regularly accuses Europeans of ripping off the US. Trump recently complained that the EU was primarily founded for the purpose of taking advantage of the US in the area of trade. On Truth Social, he criticised the EU for “powerful trade barriers, value-added taxes, ridiculous company penalties, non-monetary trade barriers, currency manipulations, unfair and unjustified lawsuits against American companies and much more”.

With higher tariffs on imports into the US, Trump wants to force more balance in world trade. Whether this strategy works is at least open. The tariffs are also risky for the Republican domestically, as they could drive up prices. An import tariff works similarly to a tax: the levy must be paid by the importing company to the state - in this case, by companies in the US. It is considered likely that the importing companies will pass on at least some of the higher costs to consumers.