A timely phone call from European Commission President Ursula von der Leyen to US President Donald Trump has temporarily halted an impending trade war, with Trump agreeing to delay his threatened 50% tariffs on European Union goods until July 9. The diplomatic intervention came just days before the tariffs were set to take effect on June 1, following Trump’s claim that negotiations were “going nowhere.”
The European Commission reported that the two leaders agreed “to fast-track the trade negotiations and to stay in close contact” during their conversation. Following this presidential exchange, EU Trade Commissioner Maroš Šefčovič engaged with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, describing these as “good calls” and reaffirming the Commission’s commitment to finding a resolution.
European markets welcomed the news of the postponement, with the Stoxx Europe 600 index recovering from Friday’s losses. However, the reprieve may be temporary unless substantial progress is made in the coming weeks. The EU has prepared retaliatory measures targeting $22.5 billion of US goods that will automatically take effect on July 14 without a deal, while also consulting on a more extensive round of tariffs affecting $101 billion of US products, including politically sensitive items like bourbon from Republican states.