Global Economy Breathes a Sigh of Relief as Trump Suspends Tariffs
The European Union has paused plans for retaliatory tariffs on US goods after President Donald Trump abruptly suspended higher US duties on the bloc and other countries, leaving China in the crosshairs of his trade war.
EU Welcomes Trump’s U-Turn
The 27-nation bloc welcomed Trump’s decision, saying it was an "important step towards stabilising the global economy". The EU responded with its own olive branch, suspending for 90 days tariffs on 20 billion euros’ worth of US goods that had been greenlit in retaliation to duties on steel and aluminium.
"We want to give negotiations a chance," EU chief Ursula von der Leyen said in a statement. She warned, however, that "if negotiations are not satisfactory, our countermeasures will kick in" and that all options remain on the table.
Other Countries Line Up to Bargain
Other countries are also lining up to bargain. Canadian Prime Minister Mark Carney called Trump’s reversal a "welcome reprieve" and said Ottawa would begin negotiations with Washington on a new economic deal after elections on April 28. Vietnam said it had agreed with the United States to start trade talks, while Pakistan is sending a delegation to Washington.
China Hits Hollywood
But there was no let-up in Trump’s trade war with China, which said the US tariffs policy "goes against the will of the world and goes against the whole world". The heightened tariffs against China took effect at the same time as retaliatory levies of 84 percent imposed by Beijing on US imports. Beijing added Hollywood to its target list on Thursday as it announced it would "moderately reduce" the number of US films it imports.
Markets React
Markets have been on a roller-coaster ride since Trump announced his tariff plans last week, with the 10 percent global levy taking effect on Saturday and the higher ones on Wednesday before the pause. Investors also began to dump US government bonds — a major economic red light since American sovereign debt is normally seen as a haven for investors in troubled times.
Trump’s Vision
Trump believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the United States. The billionaire former property tycoon has particularly raged against China, accusing it of excess production and "dumping" inexpensive goods on other economies.
Conclusion
The sudden turn of events has left the global economy holding its breath, hoping that the temporary truce will lead to a more permanent resolution. As the 90-day window expires, the world waits with bated breath to see what the future holds for international trade.
FAQs
Q: What does this mean for the European Union?
A: The EU will suspend its retaliatory tariffs on US goods for 90 days, giving negotiations a chance to succeed.
Q: What does this mean for China?
A: China remains in the crosshairs of Trump’s trade war, with no let-up in the tariffs imposed on its goods.
Q: What does this mean for other countries?
A: Other countries are lining up to bargain, with Canada, Vietnam, and Pakistan already expressing interest in trade talks.
Q: What does this mean for the global economy?
A: The temporary truce has brought a sense of relief to the global economy, but the long-term implications remain uncertain.