Global Trade Tensions Ease as U.S., China Extend Tariff Pause; EU-U.S. Trade Deal Progresses Amidst High-Level Talks

By / / Breaking News

Key Takeaways

  • The United States and China have agreed to extend their tariff pause by another 90 days, signaling a commitment to ongoing trade negotiations and stability.
  • U.S. President Donald Trump and European Commission President Ursula von der Leyen are engaged in high-stakes trade talks in Scotland, with both sides expressing a desire to resolve outstanding issues and potentially avoid a looming 30% tariff on EU goods.
  • The EU is preparing countermeasures to potential U.S. tariffs, including a €26 billion package, while also seeking a comprehensive settlement on all trade issues.

Intensive negotiations are underway as global trade relations see a mix of de-escalation and high-stakes discussions. The South China Morning Post (SCMP) reports that China and the United States have agreed to extend their current tariff pause by an additional 90 days, aiming to maintain stability as trade negotiations continue. This extension, expected to be formalized at talks in Stockholm, comes after previous 90-day suspensions and signals a desire from both Beijing and Washington to avoid further escalation of the trade war.

Meanwhile, U.S. President Donald Trump and European Commission President Ursula von der Leyen are holding crucial trade talks in Scotland. President Trump has stated his administration's desire to "resolve outstanding issues with Europe" and has praised von der Leyen, calling her "so fantastic" and a "highly respected woman." However, he has also acknowledged her as a "very tough negotiator," a sentiment echoed by von der Leyen herself, who reportedly told Trump he is a "tough negotiator."

The discussions between the U.S. and the EU are focused on averting a potential trade war, with the White House having threatened a 30% tariff on practically all imports from the EU from August 1st if no agreement is reached. The EU, in turn, has stated its readiness to retaliate with its own 30% tariffs on €93 billion of U.S. trade. The EU's objective is to reach a "comprehensive final settlement" on all outstanding trade issues, including pharmaceuticals.

Despite the ongoing challenges, there is cautious optimism. President Trump has indicated a "50-50 chance" of securing a deal with the EU, which he believes would be his administration's biggest trade agreement to date. The EU has also expressed its commitment to reaching a trade deal and has offered a "zero for zero" deal on industrial goods, including automobiles. However, "sticking points" remain, with Trump noting "maybe 20 different things" that need to be resolved. The EU is also preparing further countermeasures to protect its interests if negotiations fail.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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