Donald Trump has authorised a 90-day pause in the additional levies he placed on a wide range of countries that were willing to negotiate with the US on Wednesday, even as he ramped up tariffs on Chinese imports to 125 per cent, escalating his trade war with the Asian nation.
Earlier in the day the European Commission had urged the US administration to come to the negotiating table, after EU states approved an initial round of retaliatory tariffs on US goods.
In a Truth Social post, Mr Trump said: “Based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution...and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorised a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
Mr Trump started the post by placing further levies on China. “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125 per cent, effective immediately,” he wrote.
As the trade war intensified on Wednesday, China had earlier said it would impose 84 per cent tariffs on US goods from Thursday, up from the 34 per cent previously announced.
US stocks rocketed higher immediately after Mr Trump said he would pause tariffs on all non-retaliating countries for 90 days. Wall Street’s benchmark S&P 500 leapt 6 per cent.
It was not immediately clear on Wednesday evening whether Mr Trump’s 90-day suspension of tariffs would apply to the EU.
The majority of the EU’s counter-tariffs were due to take effect from mid-May. Although some had been pencilled in for next Tuesday.
The EU’s package of tariffs is set to hit €21 billion worth of US goods such as soybeans, almonds, oranges, steel, machinery, clothing products and luxury items such as motor-powered boats.
The increased duties on US soybean and almond imports into the EU will take effect later in the year, on December 1st.
The tariffs of up to 25 per cent had been a response to import duties Mr Trump last month levied on steel and aluminium sold into the US from Europe and elsewhere. EU states voted to approve the package of counter-tariffs on Wednesday.
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The EU’s levies will be seen as a limited initial response, given Mr Trump’s wide-ranging tariffs would impact about €380 billion worth of trade coming from the EU.
Mr Trump’s “Liberation Day” tariffs, which are effectively taxes on imported goods, will make it more expensive for nearly all European businesses and producers to sell their products on the US market.
Mr Trump had said he would soon introduce “major” tariffs on pharmaceutical imports, one of the few sectors exempt from his blanket duties announced last week. Pharmaceuticals account for a huge portion of Ireland’s significant exports to the US.
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The commission, the EU’s executive body that sets trade policy, had earlier called for the US to sit down and negotiate a deal, where both sides would suspend tariffs put on transatlantic trade.
“These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome,” the commission said in a statement.
“The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial,” the commission said.
The list of US products targeted by EU import duties was worked out over several weeks of negotiations, involving the commission and national capitals. Ireland, France and Italy successfully lobbied to remove US bourbon, whiskey and dairy from trade subjected to tariffs.
There was serious concern in Government Buildings that tariffs on US bourbon or dairy would have drawn retribution from the US that hurt exports of Irish whiskey and butter.
The EU levies will be seen as a limited initial response, given Mr Trump’s wide-ranging tariffs will impact about €380 billion worth of trade coming from the EU.
Mr Trump’s “Liberation Day” tariffs, which are effectively taxes on imported goods, will make it more expensive for nearly all European businesses and producers to sell their products on the US market.
Mr Trump said he would soon introduce “major” tariffs on pharmaceutical imports, one of the few sectors exempt from his blanket duties announced last week. Pharmaceuticals account for a huge portion of Ireland’s significant exports to the US.
All but one of the 27 EU states backed the bloc’s package of counter-tariffs on US trade. Hungarian prime minister Viktor Orban’s far-right government was the sole vote opposing tariffs being put on US goods.
Foreign minister Péter Szijjártó said Hungary was voting against the retaliatory tariffs as “escalation is not the answer”. In a post on X, Mr Szijjártó said the import levies on US trade “would cause further damage” to the European economy.
The commission is already mulling a further, broader response, in an effort to put more pressure on the US to negotiate. France has suggested the EU should consider targeting digital services, such as the US tech multinationals, as well as goods.
Martin Schirdewan, a German MEP from the left-wing Die Linke party, called for the commission to strike at the “tech oligarchy” supporting Mr Trump. “We can target digital services, digital platforms and undermine their entire business model,” he said.
The Government is lobbying within the EU to try to prevent tech and social media companies being pulled into the middle of the escalating EU-US trade dispute. – Additional reporting: The Financial Times
