In a move mirroring the United States, the European Union's executive arm announced Thursday it would suspend retaliatory tariffs on U.S. goods for 90 days. This decision aligns with President Donald Trump's temporary halt on new tariffs, aiming to foster space for negotiation.
According to Treasury Secretary Scott Bessent, the U.S. pause stemmed from ongoing negotiations with other nations, not from recent financial market volatility. President Trump added that concerns and anxieties prompted the pullback.
The day's agenda for President Trump includes a 10 a.m. ET intelligence briefing, an 11 a.m. cabinet meeting, a 12:30 p.m. swearing-in ceremony for the solicitor general, and a 4 p.m. bill signing at the White House.
Global markets experienced a surge on Thursday, highlighted by a 9% jump in Japan's benchmark index, buoyed by Trump's tariff pause. European markets also responded positively, with Germany's DAX initially climbing over 8% before settling at a 5.3% gain, while France's CAC 40 and Britain's FTSE 100 rose by 5% and 4% respectively.
Chinese shares saw more modest increases, reflecting the ongoing tariff adjustments between the two nations. Futures for the S&P 500 and the Dow Jones Industrial Average showed declines of 2.1% and 1.6% respectively.
Analysts anticipated the market rebound, noting the positive reaction in U.S. stocks following Trump's decision.
As the U.S. increases tariffs, China seeks broader international support to encourage Washington to reconsider its trade policies. So far, this effort has had limited success, with many countries hesitant to side against U.S. trade measures.
China has concentrated its outreach on Europe, exemplified by a call between Premier Li Qiang and European Commission President Ursula von der Leyen, which signaled a positive message, followed by a video conference between Chinese Commerce Minister Wang Wentao and EU Commissioner Šefčović to discuss U.S. tariffs.
Minister Wang has also engaged with ASEAN, and Premier Li has consulted with business leaders, assuring that China is prepared to handle uncertainties and introduce policies as needed.
President Trump's decision to suspend import taxes for 90 days—shortly after imposing them—while simultaneously escalating the trade conflict with China, has left global markets bewildered. This U-turn followed a period of financial market turmoil and economic uncertainty triggered by his initial tariff announcements.
White House press secretary Karoline Leavitt portrayed this policy change as a strategic move, but critics view it as a response to market pressures and mounting concerns over potential economic harm from tariffs.
European Commission President Ursula von der Leyen acknowledged Trump's announcement, stating that tariffs on $23 billion of US goods would be suspended to allow time for negotiations, but warned of countermeasures if talks fail.
The U.S. had imposed a 20% levy on EU goods as part of broader trade actions but has paused these for 90 days to facilitate negotiation.