European Commission President Ursula von der Leyen confirmed on Thursday that they have agreed to pause countermeasures against the US tariffs for 90 days.
"We took note of the announcement by President Trump. We want to give negotiations a chance," she said in a social media post. "While finalising the adoption of the EU countermeasures that saw strong support from our member states, we will put them on hold for 90 days."
Meanwhile, a spokesperson for the European Commission noted that the EU is telling the US that they are ready to start talking and make a deal.
Market reaction
EUR/USD preserves its bullish momentum and trades near 1.1070, gaining more than 1% on the day.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds losses below 1.1400 ahead of ECB policy decision
EUR/USD stays on the back foot below 1.1400 in the European session on Thursday. The pair loses ground on the back of a broad US Dollar rebound and as traders remain cautious ahead of the European Central Bank interest rate decision and Lagarde's press conference.
GBP/USD stays defensive near 1.3250 as US Dollar bounces
GBP/USD stays defensive near 1.3250 in Thursday's European trading, snapping its seven-day winning streak. A tepid US Dollar recovery amid risk appetite prompts the pair to pullback from six-month highs of 1.3292 set on Wednesday. Traders look to tariff headlibnes and US data for fresh impetus.
Gold off from fresh all-time highs on progress in US-Japan trade talks
Gold price corrects slightly to near $3,312 in Thursday’s European session after hitting a fresh all-time high of $3,358 earlier in the day. The precious metal faces profit-booking as meaningful progress in trade negotiations between the United States (US) and Japan has offered some relief on fears of potential global economic turmoil.
European Central Bank set to cut interest rates again amid easing inflation and tariff uncertainty
The European Central Bank will announce its April interest rate decision on Thursday at 12:15 GMT. Markets widely expect the central bank to lower key rates for the sixth consecutive time. This time the ECB is set to deliver another 25 basis points (bps) cut after the April policy meeting.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.