Caught flat-footed: a timeline of EU reaction to Trump's tariffs
The EU has just paused a retaliation for US tariffs that were not paused. That leaves around €200bn in EU goods still exposed to US tariffs, and €0 in US goods exposed to EU retaliatory tariffs.
There’s been a lot of confusion today about what exactly just happened with Trump’s trade war, which is understandable given the lurching policy coming out of Washington. A lot of the headlines this morning have left people with the impression that both the US and EU have called off their tariffs. That is not the case.
Donald Trump announced suddenly yesterday in a social media post that he is pausing the extra tariffs on the 80 ‘naughty’ countries punished with tariffs beyond the baseline 10% - all of them, that is, except China. The reason he gave is that the other countries didn’t retaliate like China did. And so while rewarding the others, he doubled down on his trade war with Beijing, raising tariffs again to 125%. For all the other countries on the naughty list, including the EU, their tariffs have been brought down to the baseline 10% that has already been applying to every country in the world (except Russia and North Korea) since last Saturday. The higher tariffs, which for the EU had been set at 10% more than the baseline (20%), had only been in effect for some hours yesterday before Trump cancelled them.
Trump himself said that his decision is a reaction to the market panic, which really started to look like it was edging into total collapse territory when people started divesting from US bonds. His MAGA acolytes, including his press secretary, are trying to spin this as “the art of the deal” which was his plan all along. It clearly wasn’t. But given the outcome that we now seem to have ended up with, I can see how this would be a convincing thing for people to convince themselves of (especially given all the money that Republicans reportedly made with insider trading yesterday moments before the announcement).