The European Union has celebrated Donald Trump’s decision to pause many of his new tariffs, although it would not have enjoyed this reprieve had retaliatory measures backed by most member states on Wednesday already come into effect.
Europe was hit with 20% tariffs, which will now revert to the base 10% rate during a 90-day pause, but the 125% rate on China is staying in place because of Beijing’s escalation. After some initial confusion last night, Washington confirmed that the EU was being let off because its targeting of more than €20 billion of U.S. products was not set to begin until next week.
Hungary, which was the only EU member state to vote against Brussels’ retaliatory measures, said this reprieve vindicated its decision. Foreign Secretary Péter Szijjártó celebrated by stating “once again, we were right.”
Strategic calm wins!
Szijjártó had previously warned that “escalation is not the answer” because “such measures would cause further damage to the European economy and citizens by raising prices.”
Trump’s pause also appeared to bring Commission President Ursula von der Leyen round to preferring negotiation over retaliation, announcing on Thursday that the EU’s countermeasures will be put “on hold for 90 days.”
Earlier in the day, von der Leyen praised Trump’s move as “an important step towards stabilising the global economy,” adding:
The European Union remains committed to constructive negotiations with the United States, with the goal of achieving frictionless and mutually beneficial trade.
European stocks also breathed a sigh of relief. After slumping on Wednesday morning, they rebounded sharply in early deals on Thursday, jumping by more than 7% in Frankfurt and Paris.
World officials are still getting their heads around what prompted Trump to pause reciprocal tariffs, so what happens after this 90-day period is still anyone’s guess.
