EU, United States Retaliatory Tariffs 90-Day Suspension Decision…Trade Conflict Expansion Initially Halted

Trump and EU sitting at the negotiation table (Source: CFR)

The European Union (EU) has decided to postpone the imposition of retaliatory tariffs for 90 days to avoid the expansion of trade conflict with the United States.

On the 9th (local time), Ursula von der Leyen, President of the European Commission, announced in an official statement, “We have decided to defer the retaliatory tariff measures against the United States for 90 days.” This is interpreted as a signal for easing tensions between the two sides, as it is the final agreement on the EU's previously considered plan to postpone retaliatory tariffs.

This decision is a temporary suspension of the EU's countermeasures that were mentioned in response to the all-encompassing reciprocal tariff policy promoted by U.S. President Donald Trump. The postponement is evaluated as a move that leaves 'room for compromise', as tariff conflicts could have significant negative impacts such as supply chain disruptions, consumer price increases, and diminished investment sentiment for both Europe and the United States.

The market views this postponement as a positive signal that buys time for the resumption of negotiations between the U.S. and the EU, but also believes there is still a possibility that the conflict could reignite, as it is not a fundamental policy change.