European Union hits pause on planned retaliatory tariffs for U.S.

The European Union will pause its first countermeasures against U.S. tariffs after President Donald Trump temporarily lowered the hefty duties he had just imposed on dozens of countries, European Commission chief Ursula von der Leyen said on Thursday.

The bloc was due to launch counter-tariffs on about 21 billion euros ($32.7 billion Cdn) of U.S. imports from next Tuesday in response to Trump's 25 per cent tariffs on steel and aluminum. It is still assessing how to respond to U.S. car tariffs and the broader 10 per cent levies still in place.

"We want to give negotiations a chance," von der Leyen said on X. "While finalizing the adoption of the EU countermeasures that saw strong support from our member states, we will put them on hold for 90 days."

In Europe, euro zone government bond yields jumped, spreads tightened and markets scaled back their bets on European Central Bank rate cuts after Trump's latest announcement. European shares surged.

Trump's move was an important step toward stabilizing the global economy, von der Leyen said, before announcing a pause in the EU's own counter-tariffs.

But she warned they could be brought back in.

"If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues," she said, before adding: "As I have said before, all options remain on the table."

The EU had been due to impose extra tariffs on U.S. imports including maize, wheat, motorcycles, poultry, fruit and clothing. Those are now suspended.

Despite the reprieve, some central bankers and analysts remained cautious.

European Central Bank policymaker Francois Villeroy de Galhau, speaking of the pause in the tariff hike, told France Inter Radio it was "less bad news" than before, but uncertainty remained and that was a threat to trust and growth.

Trump's sudden decision on Wednesday to pause most of his hefty new duties brought relief to battered global markets and anxious global leaders, even as he ratcheted up a trade war with China.

Trump's reversal on the tariffs imposed on other countries is also not absolute. A 10 per cent blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminum that are already in place. That 10 per cent blanket duty does not include Canada; instead, Canada continues to face 25 per cent tariffs on non-CUSMA goods, on steel and aluminum and some vehicles. 

The Trump administration is weighing offers from more than a dozen countries on tariff deals and is close to reaching agreements with some of them, White House economic adviser Kevin Hassett said.

"USTR has informed us that there are maybe 15 countries now that have made explicit offers that we're studying and considering and deciding whether they're good enough to present the president," Hassett told reporters at the White House, referring to the U.S. trade representative.