Trump Changes Stance Again… "EU Tariffs Deferred to July"

Sudden Reversal Just Two Days After Notification

On the 23rd, Threatened "50% Tariff from Next Month"

Changed Stance After Call with EU Commission President

Trump: "He Requested to Postpone the Date"

Will the US Bluff Work Again?

Aims to Gain Advantageous Negotiation Position

Significant Differences with EU Suggest Challenges Ahead

US President Donald Trump announced that the '50% tariff' he warned would be imposed on the European Union (EU) starting next month will be deferred until July 9. This change comes just two days after he suddenly notified of the tariff increase, expressing dissatisfaction with tariff negotiations with the EU. Significant differences in positions between the EU and the US on service trade balances suggest challenges in future negotiations.

◇Trump Reverses EU Tariff Decision in Two Days

President Trump, speaking to reporters before returning to the White House after spending the weekend at his golf course in New Jersey, said on the 25th (local time) that he had spoken with Ursula von der Leyen, President of the European Commission. He continued, "He called and requested to postpone the 'June 1' date," adding, "He said he wanted serious negotiations, and I agreed to move the tariff imposition date from June 1 to July 9." President Trump added, "The Commission President stated that negotiations would begin promptly." July 9 marks the expiration of the reciprocal tariff deferral announced by President Trump last month.

This announcement came just two days after President Trump warned of a 50% tariff imposition on the EU. On the 23rd, Trump expressed dissatisfaction with tariff negotiations, stating, "The EU was created with the purpose of exploiting the US in trade, making it very difficult to deal with." He emphasized that "their strong trade barriers, value-added tax, absurd corporate penalties, non-monetary trade barriers, currency manipulation, and unfair and unjust lawsuits against US companies result in an annual trade deficit of over $250 billion with the US."

President Trump's stance on tariff policy has been inconsistent. The EU is expected to continue to be subject to the existing 10% basic tariff until July 9.

◇"US Dissatisfaction with EU Value-Added Tax, etc."

The tariff deferral is analyzed as a 'Trump-style bluff' aimed at gaining an advantageous negotiation position. In fact, President Trump's tariff imposition announcement came just hours before a phone call between Maroš Šefčovič, EU Commissioner for Trade and Economic Security, and Jamieson Greer, US Trade Representative (USTR) representative. Treasury Secretary Scott Besant also stated on Fox News after the 50% tariff announcement last week that "President Trump's threat is intended to stimulate negotiations with Europe."

However, the EU has made it clear that it will not be swayed by US intentions. Commissioner Šefčovič emphasized that "(trade) should be based on mutual respect, not threats."

Given the stark differences in positions between the EU and the US, it is expected that finding a breakthrough in future negotiations will be difficult. While President Trump claims that the US has an annual trade deficit of $250 billion with the EU, the EU emphasizes that the US runs a surplus in the services sector. Combining the trade balances of goods and services, the US trade deficit is claimed to be only 50 billion euros (approximately $78 billion). The WSJ pointed out that "Trump's aides are dissatisfied with the EU's reluctance to offer concrete proposals to address US concerns over value-added tax, automotive regulations, etc."

Reporter Kim Dong-hyun 3code@hankyung.com