FX.co ★ EU Extends Tariff Pause as Trump Threatens 30% Import Levy

The European Union announced on Sunday its decision to extend the suspension of countermeasures against U.S. tariffs until early August in an effort to reach a negotiated agreement. This declaration came shortly after President Trump, on Saturday, threatened a 30% tariff on most imports from the EU and Mexico to begin on August 1. This move is intended to pressure these nations into reaching new trade agreements within a short timeframe. White House economic adviser Kevin Hassett underscored that "the tariffs are real" should favorable trade deals not be reached, highlighting that Trump has communicated his firm position through official letters.

EU Commission President Ursula von der Leyen reiterated the bloc’s "two-track" strategy—conducting ongoing negotiations while also preparing for potential retaliation if necessary. German Chancellor Friedrich Merz expressed strong dedication to achieving a deal, cautioning that a 30% tariff would critically impact Germany’s export-driven economy. Von der Leyen mentioned that the EU's Anti-Coercion Instrument, which would permit significant retaliatory actions, is not currently under consideration, stating, "we are not there yet."