International financial markets remain tense as Trump postpones negotiations on trade agreements with the European Union.
U.S. President Donald Trump has delayed plans to impose tariffs on the European Union, bringing relief to global markets that had been shaken by his previous threats. The tariff deadline has been pushed back to July 9, following a "very nice" phone call between Trump and European Commission President Ursula von der Leyen.
Originally, Trump had threatened a 50% levy on European imports, but he has now agreed to extend ongoing trade talks. The decision to delay the tariffs came after EU leaders expressed concerns about the impact on trade in cars and agricultural goods. Some tariffs have been reduced, but a 25% levy on EU steel and aluminium remains in place.
European markets welcomed the news, with Germany's Dax and the Cac 40 in Paris rising by over 1% in afternoon trading. The EU-US trade relationship is described as complex, but both sides are now committing to speed up negotiations and maintain open communication.
Negotiations between the two parties had previously stalled, following the collapse of talks on the Transatlantic Trade and Investment Partnership (TTIP) in 2016. The current negotiations are focused on resolving specific tariff threats rather than establishing a major new trade pact.
The tech giant Apple was also mentioned in Trump's latest threats, with the President stating he would impose at least a 25% import tax on iPhones not manufactured in the U.S. However, the focus remains on the trade talks with the EU, which have now taken on a new impetus. The deadline for these talks is July 9, 2021.
It remains to be seen whether a comprehensive trade agreement will be reached, but both sides have expressed a willingness to engage in meaningful negotiations. The current negotiations are designed to avert the imminent tariff increase rather than establishing a major new trade pact.
Markets are expected to react positively to the news that trade talks are back on track, with the FTSE 100 expected to rise on Tuesday in London. Markets in the U.S. were closed on Monday for Memorial Day, so the full impact of the trade talks is yet to be seen.
- The postponement of tariffs on European Union imports by President Trump has alleviated concerns within the economy, business, and finance sectors, as well as markets, given the potential impact on trade.
- The complex EU-US trade relationship has experienced a recent boost, with both parties committing to expedite negotiations and maintain open communication, creating a positive general news atmosphere.
- The delay in tariffs on European imports could significantly influence various industries, including automotive and agriculture, as well as the politics surrounding global trade, as negotiations extend towards the July 9 deadline.
