In a surprise twist that has global markets on edge, President Trump agreed to push back 50% tariffs on European Union goods until July 9 after a 'very nice call' with EU chief Ursula von der Leyen. Here's what happened – and why it matters to you.
Deadline Extended: What's the Deal?
Originally set to kick in on June 1, the 50% tariff threat was halted when von der Leyen asked for more time to hammer out a serious agreement. Trump told reporters in New Jersey that he 'agreed to do that' and would hold off until early July, giving negotiators a rare window to find common ground.
EU's Firm Stance
Brussels has warned that any deal must rest on mutual respect, not threats. EU trade chief Maros Sefcovic emphasized the bloc's commitment to an agreement, while German Finance Minister Lars Klingbeil urged 'serious negotiations' to avoid further provocations. Meanwhile, European lawmakers have flagged potential counter-tariffs on up to €100 billion of U.S. goods if talks stall.
Global Impact: Money and Markets
The EU is one of the U.S.'s biggest trading partners: last year, the bloc shipped over $600 billion in goods to the U.S., while buying $370 billion in return. On services, U.S. firms hold a €50 billion ($57 billion) surplus. Yet a fresh wave of tariffs could drive up consumer prices on both sides of the Atlantic.
Recent polling shows 69% of U.S. adults expect higher costs for everyday goods, and half say the economy has worsened since early 2024. In response, 60% have cut spending – over 70% of them are eating out less, and 57% are trimming entertainment budgets. Economists now peg the chance of a U.S. recession at up to 60% if tariffs persist.
What's Next?
Negotiations resume as summer heats up, with entrepreneurs, travelers, and investors watching closely. The outcome will shape global trade routes, pocketbooks, and the pace of economic recovery – proof that in our connected world, a phone call can echo from Wall Street to the world's cafes.
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EU defies U.S. threat as Trump extends tariff deadline to July 9
cgtn.com
