European Commission President Ursula von der Leyen praised US President Donald Trump’s decision to pause planned reciprocal tariff increases, describing it as a significant move towards stabilizing the global economy.
In a statement on her X handle, von der Leyen highlighted the importance of clear and predictable trade conditions for global supply chains.
Von der Leyen emphasized the EU’s commitment to constructive negotiations with the US, stating, “Clear, predictable conditions are essential for trade and supply chains to function. The European Union remains committed to constructive negotiations with the United States.”
This development comes as the EU seeks to balance its trade relationships, particularly with the US and China.
The EU aims to promote a strong, reformed trading system that is free, fair, and based on a level playing field.
The EU’s ongoing efforts to negotiate with the US reflect its commitment to finding mutually beneficial trade agreements that support global economic stability.
Trump’s announcement of a complete pause on reciprocal tariffs, but exempted China.
However, he increased reciprocal tariffs against China to 125%, up from 104%.
Trump was quoted as saying that some “countries were kissing his ass, pleading to negotiate.”
The US raised tariffs on Chinese goods to 104% following a White House deadline for China to remove its retaliatory tariffs.
The US reciprocal tariff issues are a complex and contentious.
The US has imposed reciprocal tariffs on goods imported from countries with which it has a trade deficit. The tariffs aim to balance trade relationships and protect domestic industries. The Trump administration introduced these tariffs, citing unfair trade practices and tariffs imposed by other countries ¹.
Tariff Rates and Countries Affected
- A universal 10% tariff on all imported goods, effective April 5, 2025
- Higher rates for countries with significant trade surpluses with the US, including:
- China: 34%
- Vietnam: higher rates
- India: 26%
- Canada and Mexico: 25%
Impact and Reactions
- The tariffs have sparked strong reactions from global trade partners and businesses relying on imports
- Canada has imposed retaliatory tariffs on $29.8 billion in US goods
- The World Trade Organization (WTO) has expressed concerns about the impact on global trade
- The tariffs may not effectively reduce the US trade deficit, as imports and exports are interconnected
- The policy may harm US consumers and businesses by increasing prices and reducing access to goods
- Other countries may retaliate with their own tariffs, escalating a trade war ¹ ²
- The US trade deficit may not decrease, as tariffs can reduce exports through currency effects or foreign retaliation
- Global trade may be severely impacted, with potential long-term consequences for economic growth and stability
- The US economy may face increased costs, including higher prices for consumers and reduced competitiveness for businesses.
Meanwhile, World Trade Organisation WTO Director General Dr. Ngozi Okonjo-Iweala warned that the US-China tariff war could reduce trade between the two economic giants by 80%, damaging the global economy.
“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade,” she said.
“Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 percent,” Okonjo-Iweala stated.
The US and China together account for three percent of world trade, and the conflict could “severely damage the global economic outlook.”
Okonjo-Iweala warned that the world economy risks breaking into two blocs, one centered around the US and the other China.
“Of particular concern is the potential fragmentation of global trade along geopolitical lines,” she said.
“A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven percent,” Okonjo-Iweala added.
She urged WTO members “to address this challenge through cooperation and dialogue.”
“It is critical for the global community to work together to preserve the openness of the international trading system,” Okonjo-Iweala said.
“WTO members have agency to protect the open, rules-based trading system,” she emphasized.