EU pauses countermeasures following Trump's tariff reprieve

The European Union will pause its first countermeasures against US 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 ($23.25 billion) of US imports from next Tuesday in response to Trump's 25% tariffs on steel and aluminium. It is still assessing how to respond to US car tariffs and the broader 10% levies still in place.

"We want to give negotiations a chance," von der Leyen said on X. "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."

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.

His turnabout, which came less than 24 hours after steep new tariffs kicked in, followed the most intense episode of financial market volatility since the early days of the Covid-19 pandemic.

US stock indexes shot higher on the news, and the relief continued into Asian and European trading on Thursday.

Before Trump's U-turn, the upheaval had erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields that appeared to catch the US president's attention.

Trump kept the pressure on China, the world's No. 2 economy and second-biggest provider of US imports with an increase of tariffs on Chinese imports to 125% from the 104% level that kicked in on Wednesday.

He also signed an executive order aimed at reducing China's grip on the global shipping industry and at reviving US shipbuilding.