US president continues to fuel global economic uncertainty with erratic trade policy.
United States President Donald Trump has backed away from launching a trade war with the European Union, two days after threatening to impose punishing tariffs.
Trump said on Sunday that he has agreed to extend trade negotiations with the EU to July 9 following a call with European Commission President Ursula von der Leyen. As part of that agreement, the US will also hold back from imposing a 50 percent tariff on imports from the bloc, which Trump announced on Friday would be imposed on June 1.
The announcement is the latest U-turn on US trade policy in a long series in recent months, and will only add to the uncertainty that Trump’s erratic and unpredictable policy is casting over the global economy.
Trump said, “[von der Leyen] said she wants to get down to serious negotiation. We had a very nice call.”
“She said we will rapidly get together and see if we can work something out,” he told reporters.
The European Commission chief noted that she had shared a “good call” with Trump and that the EU was ready to move swiftly.
Backtracked
Trump set a 90-day window for trade negotiations with the EU in April, making them due to end on July 9.
He had backtracked on Friday, saying he was not interested in reaching an agreement at all and escalated the transatlantic trade dispute.
“I’m not looking for a deal,” the president said. “We’ve set the deal – it’s at 50 percent.”
However, by Sunday, he welcomed von der Leyen’s assertion that the bloc is willing to negotiate but needs more time.
“Europe is ready to advance talks swiftly and decisively,” she recapped on X. “To reach a good deal, we would need the time until July 9.”
The bloc’s top trade negotiator, Maros Sefcovic, had on Friday urged the US to show “mutual respect, not threats”.
Trump roiled financial markets with his Liberation Day announcement in April, which threatened sweeping tariffs on multiple countries.
However, amid nosediving markets, threats of retaliation, and turmoil across the globe, the US president has in many cases softened his stance in favour of negotiations.
Washington has made deals with the United Kingdom and opened talks with China. Those moves have buoyed markets somewhat, but uncertainty persists as the US stance continues to shift.