In a dramatic turn of events, the European Union announced a 90-day suspension of its planned countermeasures against the United States following President Donald Trump’s decision to temporarily roll back sweeping new tariffs. While the reprieve is being welcomed as a diplomatic window, it comes with sharp caveats — and no one’s under the illusion that the storm has passed.
European Commission President Ursula von der Leyen made the announcement Thursday, stating plainly: “We want to give negotiations a chance.” With EU member states unified behind the initial plan to retaliate against U.S. tariffs with €21 billion worth of levies on American goods, the pause represents not a retreat, but a strategic delay.
And for good reason.
Trump’s initial volley — a 25% tariff on steel and aluminum and broader 10% levies — sent shockwaves through global markets and sparked immediate threats of retaliation from Europe, China, and beyond. But after a sudden market meltdown, with trillions erased from equities and U.S. bond yields spiking to alarming levels, the president appeared to pivot.
On Wednesday, he hit pause on most of the new duties for dozens of countries — except China. That particular fight escalated, with Trump raising Chinese tariffs from 104% to a staggering 125%, and signing an executive order aimed at breaking Beijing’s control over global shipping. China, in turn, vowed to “follow through to the end,” while keeping the door to talks open — if mutual respect is on the table.
But while the China clash dominates headlines, the transatlantic rift remains unresolved. The EU’s suspension doesn’t reverse the tariffs already in place on autos, steel, and aluminum, and Brussels has made it clear: the countermeasures are ready to go if talks fail.
“Preparatory work on further countermeasures continues,” von der Leyen warned. “All options remain on the table.”
Among the suspended EU retaliatory measures were new tariffs on maize, wheat, motorcycles, poultry, fruit, and clothing — key American exports now caught in limbo. Meanwhile, Canadian and Mexican goods remain subject to 25% fentanyl-related duties due to noncompliance with USMCA origin rules.
Markets briefly rallied on the pause. European bond yields jumped, stock indexes surged, and ECB rate cut expectations were tempered. But the reprieve also revealed underlying fragility. Business leaders, like the head of France’s wine and spirits group FEVS, called it “half good news,” citing ongoing inflation pressure and logistical chaos from a 90-day shipping window. Tariffs may be lower — for now — but the risk remains fully intact.
And the clock is already ticking.
