The European Union paused its Retaliatory Tariffs Suspension on U.S. goods, initially valued at €21 billion, including American exports like bourbon whiskey and motorcycles. This move is taken after Trump announced a 90-day suspension on his administration’s revived global tariffs, goal is to reset the tone of transatlantic trade tensions.
This mutual tariff pause is meant to giving space for negotiations, reflecting both sides conceding that continued triggering harm their economies, Transatlantic unity is needed to face shared issues because global economic recovery remains weak. The cooperation between EU and US is key while China and Russia present strategic challenges.
Why did the EU step back?
According to the reports of The Guardian “We want to give negotiations a chance,’ says Ursula von der Leyen in announcement of 90-day pause.”
The EU wants to avoid escalating a trade war with the U.S. that started under Trump’s earlier presidency. In previously, tit-for-tat tariffs hurt industries on both sides of the Atlantic. European experienced fall in steel and American experienced in agriculture sector.
EU decision for pausing tariffs is showing witnessing a willingness to negotiate rather than retaliate. It’s a tactical move by EU but it is needed for economic stability, holding off penalties while retaining the ability to reimpose them if talks fail.
Europe’s economy is dealing with slow growth, high borrowing costs, and external shocks like the war in Ukraine which impacting more on the slower growth led to economic crisis and businesses downfall. It cannot afford additional burdens from a full-scale tariff war.
With global instability, the EU and U.S. need closer alignment, significantly on Chinese policy, digital trade standards, and support for Ukraine is needed. A trade fight would weaken that unity and this will end the economic totally.
Will the EU reimpose tariffs if talks fail?
Almost yes, because European Commission President Ursula von der Leyen made it clear that the Retaliatory Tariffs Suspension is a temporary pause. If US reactivate tariff plans or if talks stall, the EU has already prepared a list of products for retaliation.
What industries are affected?
- American exporters of spirits, motorbikes, and food products which is daily essential products are benefit from the pause.
- European steel and aluminum manufacturers remain cautious, as they want protective measures to avoid being undercut by cheaper imports. They are still in instable condition.
- Global supply chains could stabilize slightly due to this truce not just economically but also in requirement of resources, especially in raw materials and machinery.
Read also: US China Trade Tensions
Will the strategy work to stabilize global market?
Short-term:
Markets may stabilize, especially in sectors including technology, manufacturing are vulnerable to trade uncertainty.
Mid-term:
Negotiations will shape the future of U.S. and EU global trade expect push-and-pull on carbon border taxes, digital services, and industrial subsidies.
Long-term:
Retaliatory Tariffs Suspension shows the EU’s willingness to act as a balanced geopolitical actor, prioritizing diplomacy over confrontation.
