US President Donald Trump backed away from his threat to impose 50% tariffs on imports from the European Union next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal.
European assets rallied on Monday.
The euro hit its highest level against the dollar since April 30, while futures in Europe and Germany indicated stocks would open up more than 1.5%.
Trump had said on Friday said he was recommending a 50% tariff effective from June 1, expressing frustration that trade negotiations with the EU were not moving quickly enough.
The threat roiled global financial markets and intensified a trade war that has been punctuated by frequent changes in tariff policies toward US trading partners and allies.
The US president’s softened stance two days later marked another temporary reprieve in his erratic trade policy, even if the latest whipsawing in decision making reminded policymakers and investors how quickly circumstances could change.
Trump, who has repeatedly expressed disdain for the EU and its treatment of the United States on trade, relented after European Commission President Ursula von der Leyen told him on Sunday that the EU needed more time to come to an agreement.
She asked him during a call to delay the tariffs until July, the deadline he had originally set when he announced new tariffs in April.
Trump told reporters he had granted the request.
“We had a very nice call, and I agreed to move it,” Trump said before returning to Washington after a weekend in New Jersey.
“She said we will rapidly get together and see if we can work something out.” Von der Leyen said in a post on X that she had a “good call” with Trump and that the EU was ready to move quickly.
“Europe is ready to advance talks swiftly and decisively,” she said. “To reach a good deal, we would need the time until July 9.”
In early April, Trump set a 90-day window for trade talks between the EU and the United States, which was to end on July 9.
But on Friday he upended that time frame and said he wasn’t interested in a deal at all.
Talks have been stuck, with Washington demanding unilateral concessions from Brussels to open up to US business while the EU seeks an agreement in which both sides could gain, according to people familiar with the talks.