U.S. President Donald Trump said on Sunday that he will postpone 50% tariffs on imports from the European Union until July 9. He made the announcement after a phone call with European Commission President Ursula von der Leyen. Trump posted on Truth Social, “I agree to an extension—July 9, 2025—it’s my pleasure.” He cited von der Leyen’s message on X, which said the EU and U.S. share a vital trade relationship and need time to secure a good deal.
Background on Tariff Threats
Earlier this year, Trump announced a 20% “reciprocal tariff” on EU goods, effective April 2. He then cut it to 10% within 90 days. However, he warned on June 1 he would raise the tariff to 50%, blaming slow talks among EU members and little progress in negotiations. EU Trade Commissioner Maroš Šefčović said the bloc sent a revised trade proposal to the U.S. last week.
Stock Market Rebound in the U.S. and Europe
News of the delay sent U.S. stock index futures higher on Monday. As of early trading, Dow Jones futures rose 0.85%, the S&P 500 futures gained 1%, and Nasdaq 100 futures climbed 1.19%. In Europe, the Stoxx 600 index opened up 1.00%, while Germany’s DAX jumped 1.67%. Kyle Rodda, senior market analyst at Capital.com Australia, said traders see the tariff threats as bluffs. He added they now bet that any tariffs will eventually be reduced.
Mixed Moves in Asian Markets
Asian markets showed mixed results following the news. Japan’s Nikkei 225 and South Korea’s Kospi both rose. In contrast, Australia’s ASX 200 and Hong Kong’s Hang Seng fell in early Thursday trading.
Dollar Weakness, Euro Strength
The euro climbed past $1.40 in Asian trading on Monday, its highest since April 29. The dollar weakened after Trump’s tariff threats, and the U.S. dollar index fell below 99 for the first time this month. Rodda noted the drop reflects a slight loss of confidence in U.S. assets rather than just policy convergence.
Wider Economic Factors
Recent events have weighed on U.S. assets. Moody’s downgraded the U.S. credit rating over rising government debt and a widening budget deficit. Proposed tax cuts and spending plans face strong opposition in Congress. These concerns helped drive another sell-off in U.S. stocks, bonds, and the dollar over the past week.
