On May 25, 2025, President Donald Trump announced a delay in the implementation of a proposed 50% tariff on European Union (EU) imports, extending the deadline from June 1 to July 9. This decision followed a phone call with European Commission President Ursula von der Leyen, who requested more time for negotiations. Trump described the conversation as productive and expressed willingness to seek a resolution.
The proposed tariffs target key EU exports to the U.S., including automobiles, pharmaceuticals, and machinery. In 2024, the U.S. imported approximately $606 billion in goods from the EU, creating a trade deficit of $235.6 billion in goods.
In response to the tariff threat, the EU has prepared a €21 billion retaliatory package and is considering additional measures targeting U.S. tech firms . Both sides have acknowledged the need for further negotiations to avoid escalating trade tensions.
Market reactions have been cautious. The S&P 500 and other major indices experienced declines following the tariff announcement, reflecting investor concerns over potential economic impacts.
The delay provides a window for renewed negotiations, with both the U.S. and EU expressing a desire to reach a mutually beneficial agreement before the new July 9 deadline.
Sources: Business Insider, Financial Times, WSJ
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