Tariff Talks with EU Extended: US Holds Off on 50% Duties Until July 9

US President Donald Trump has extended the deadline to conclude tariff negotiations with the European Union (EU) until July 9, providing both sides a brief window to avoid a potential trade war. This follows a phone conversation between President Trump and European Commission President Ursula von der Leyen, who requested additional time to finalise a mutually beneficial agreement.

Initially, Trump had proposed a 20 per cent tariff on most EU imports, citing what he called “unfair trade practices” and an imbalance in goods flow. However, he later revised the proposed tariff down to 10 per cent, announcing a temporary freeze on any hike until July 8 to give room for negotiation. But growing frustration with the EU’s pace in talks led Trump to escalate his rhetoric last Friday, threatening to impose a steep 50 per cent tariff on EU goods if “serious progress” wasn’t made.

“The EU has had plenty of time. We need fair access and fair treatment for American businesses,” Trump said during a public address, adding that the US could no longer tolerate what he described as “one-sided trade benefits to Europe at the expense of American workers.”

In response, European Commission President von der Leyen expressed willingness to reach a deal but emphasized the complexity of aligning all 27 EU member states on a common trade position. “I have spoken with President Trump and asked for a short extension. The European Union is committed to achieving a fair deal, but we need time to make sure it’s a strong and balanced one,” she said.

The extension until July 9 is now viewed as a critical window for both sides to iron out key issues including tariffs on automobiles, agricultural goods, and digital services. Trade analysts believe that if talks break down, a full-blown tariff war could have wide-ranging consequences for global supply chains and investor sentiment.

European stocks experienced minor volatility following Trump’s tariff threat, with automobile and manufacturing sectors taking a temporary hit. Meanwhile, in the US, business groups have urged the administration to avoid further escalation, warning that additional duties would hurt American consumers and exporters alike.