EU backs down over US tariff retaliation following latest move by Trump
By SABRINA PENTY
The European Union will pause its first countermeasures against U.S. tariffs after President Donald Trump temporarily lowered the hefty duties he had just imposed on dozens of countries, European Commission chief Ursula Von der Leyen said on Thursday.
The bloc was due to launch counter-tariffs on about 21 billion euros of U.S. imports from next Tuesday in response to Trump's 25 per cent tariffs on steel and aluminium.
It is still assessing how to respond to U.S. car tariffs and the broader 10 per cent levies still in place.
'We want to give negotiations a chance,' von der Leyen said on X.
'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.'
Trump's sudden decision on Wednesday to pause most of his hefty new duties brought relief to battered global markets and anxious global leaders, even as he ratcheted up a trade war with China.
His turnabout, which came less than 24 hours after steep new tariffs kicked in, followed the most intense episode of financial market volatility since the early days of the COVID-19 pandemic.
The European Union will pause its first countermeasures against U.S. tariffs, European Commission President Ursula von der Leyen said today
It comes as Donald Trump on Wednesday decided to pausehs tariffs. Pctured: Trump speaks as he signs executive orders and proclamations in the Oval Office at the White House in Washington, D.C., U.S., April 9, 2025
U.S. stock indexes shot higher on the news, and the relief continued into Asian and European trading on Thursday.
Before Trump's U-turn, the upheaval had erased trillions of dollars from stock markets and led to an unsettling surge in U.S. government bond yields that appeared to catch the U.S. president's attention.
Trump kept the pressure on China, the world's No. 2 economy and second-biggest provider of U.S. imports with an increase of tariffs on Chinese imports to 125 per cent from the 104 per cent level that kicked in on Wednesday.
He also signed an executive order aimed at reducing China's grip on the global shipping industry and at reviving U.S. shipbuilding.
China rejected what it called threats and blackmail from Washington.
Beijing will 'follow through to the end' if the U.S. insists on its own way, Commerce Ministry spokesperson He Yongqian told a regular press briefing.
The country's door was open to dialogue, but this must be based on mutual respect, the ministry said.
Beijing may again respond in kind after imposing 84 per cent tariffs on U.S. imports on Wednesday to match Trump's earlier tariff salvo.
Today China warned that American tariffs 'go against the world' after Trump said he was raising levies on China to 125 per cent. Chinese President Xi Jinping speaks during an international business meeting at The Great Hall Of The People on March 28, 2025 in Beijing, China
Trump, who claims the tariffs aim to fix U.S. trade imbalances, said a resolution with China on trade is also possible.
But officials have said they will prioritize talks with other countries as Vietnam, Japan, South Korea and others line up to try and strike a bargain.
China's yuan hit its lowest against the dollar on Thursday since the global financial crisis.
In Europe, euro zone government bond yields jumped, spreads tightened, and markets scaled back their bets on European Central Bank rate cuts after Trump's latest announcement, as European shares surged.
Trump's move was an important step towards stabilising the global economy, von der Leyen said, before announcing a pause in the EU's own counter-tariffs.
But she warned they could be brought back in.
'If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues,' she said, before adding: 'As I have said before, all options remain on the table.'
Trump's reversal on tariffs is not absolute. A 10 per cent blanket duty on almost all U.S. imports will remain in effect, the White House said.
The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place.
The U.S. tariff pause also does not apply to duties paid by Canada and Mexico, because their goods are still subject to 25 per cent fentanyl-related tariffs if they do not comply with the U.S.-Mexico-Canada trade agreement's rules of origin.
The EU had been due to impose extra tariffs on U.S. imports including maize, wheat, motorcycles, poultry, fruit and clothing. Those are now suspended. Elsewhere, India was among countries that said it wants to move quickly on a trade deal with the United States.
Meanwhile, oil prices retreated 2 per cent on Thursday as fears of a deepening U.S.-China trade war and a possible recession eclipsed earlier relief created by Trump's announcement of a pause.
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Some central bankers also remained cautious.
European Central Bank policymaker Francois Villeroy de Galhau, speaking of the pause in the tariff hike, told France Inter Radio it was 'less bad news' than before, but uncertainty remained and that was a threat to trust and growth.
And business leaders warned that not all was resolved.
The head of the French wine and spirits lobby group FEVS said Trump's decision to hit pause was 'half good news.'
Nicolas Ozanam said the move will initially allow French wine and spirits companies to resume shipments with lower tariffs, and therefore at the same level as other suppliers.
But the 90-day window created logistical constraints, and given that 10 per cent custom duties remained in place, the sector still faced inflationary pressures.
'This will still lead to a rise in prices and therefore a drop in consumption in the United States,' he told Reuters.
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