[By Guancha Observer Net, Ruan Jiaqi]

Following an active phone call from European Commission President Ursula von der Leyen, U.S. President Donald Trump agreed last Sunday (the 25th) to delay the threat of imposing a 50% tariff on the EU and restored the negotiation deadline to July 9th. This marks the first major easing of the chilly economic and trade relations between the U.S. and the EU since Trump began his second term in January this year, which Trump views as a "victory".

According to reports by NBC and Bloomberg, on local time 27th, Trump posted on his self-created social media platform "Truth Social", claiming that his threat to impose a 50% tariff on the EU successfully accelerated the negotiations.

In his post, he wrote, "I have just received information that the EU has called to request a prompt determination of the meeting date. This is a positive signal, and I hope they can eventually open up trade between the countries of Europe and the United States. If they do so, they will be very happy and move toward success!!!"

This statement also carries an implicit threat. Trump reiterated that if both sides cannot reach a fair agreement or if the U.S. encounters what he perceives as "unfair treatment", he retains the right to impose tariffs.

Trump specifically mentioned the tariff threat from last week, indicating with significance, "I am quite satisfied with this (tariff plan), given the EU's sluggish progress in negotiations." The Guardian interpreted this as a "subtle warning" of further taxation by Trump.

Bloomberg reported that Trump did not provide details about the meeting date or the issues he hoped to resolve in the negotiations. The European Commission refused to comment on Trump's latest remarks.

Additionally, according to the Guardian citing Brussels sources, EU Trade Commissioner Šefčovič will meet with U.S. Trade Representative Grier at the OECD meeting in Paris next Tuesday. It is expected that another group of officials will travel to Washington for technical consultations in the coming days.

The source emphasized that the EU's negotiation strategy has not changed; its core goal remains to reach an agreement with the U.S.: eliminating industrial product tariffs while increasing purchases of U.S. soybeans, weapons, and liquefied natural gas.

The Bloomberg source also revealed that the EU Commission is focusing strategic priorities on key industries and tariff and non-tariff barriers, hoping to link solutions to regulatory barriers with plans to simplify rules.

In addition, Šefčovič is said to lead political negotiations on steel, aluminum, automobiles, pharmaceuticals, semiconductors, and civil aviation aircraft industries. These negotiations will take place simultaneously with technical discussions regarding tariffs and non-tariff barriers.

Ursula von der Leyen and Donald Trump, file photos

With less than two months until the so-called "reciprocal tariff" suspension deadline of July 9th, the transatlantic negotiations remain deadlocked. Last week (on the 21st), to promote the progress of the negotiations, the EU submitted a revised trade proposal to the U.S., which included several measures addressing American interests, such as mutual reduction of tariffs on many goods, joint responses to global challenges, and mutual investment and strategic procurement. However, it was rejected by the U.S. and faced Trump's threat of increased tariffs.

On local time 23rd, Trump suddenly posted that he suggested imposing a 50% tariff on the EU starting June 1st.

He also criticized the EU, stating that its primary purpose was to take advantage of the U.S., "They set up strong trade barriers, levy value-added tax, absurd corporate fines, non-monetary trade barriers, currency manipulation, unfair and unreasonable litigation against American companies, etc...."

The Financial Times pointed out that Trump's policy change represents a significant escalation of the transatlantic trade war, shocking European negotiators.

On the day Trump issued the threat, Šefčovič, the EU commissioner, spoke on the phone with U.S. Commerce Secretary Luetkemeyer and U.S. Trade Representative Grier.

After the call, Šefčovič stated that the EU is fully engaged in trade negotiations with the U.S., but is prepared to defend its own interests. He wrote on social media that trade between Europe and the U.S. is "unequaled," but must be guided by mutual respect rather than threats.

On the same day, U.S. Treasury Secretary Bostic told Fox News that he hopes Trump's tariff threats will "completely ignite the EU's sense of urgency."

Finally, the tense situation eased after a phone call from von der Leyen. The Financial Times reported that the office of von der Leyen confirmed that she proactively called Trump on May 25th, stating that the EU is ready to "quickly and decisively" advance trade negotiations with the U.S., hoping that Trump returns to his initial 90-day negotiation period (i.e., the suspension of "reciprocal tariffs").

That night, Trump responded by posting online that he agreed with von der Leyen's request, which immediately drove the three main U.S. stock indexes upward. On Tuesday morning, Wall Street opened higher, with the S&P 500 index rising by 2%, the Dow Jones Industrial Average increasing by 1.7%, and the NASDAQ Composite Index rising by 2.4%.

The Financial Times pointed out that this is the first publicly disclosed call between leaders of the U.S. and the EU since Trump took office. The report also considered von der Leyen's stance as a possible shift towards "seeking compromise" by the European Commission.

The aforementioned sources also told Bloomberg that after Šefčovič's call with the U.S. side, EU member states were briefed on the discussion on Monday. Some member states urged the EU to prepare countermeasures in areas such as semiconductors and pharmaceuticals.

These sources added that many EU officials and member states still believe that Trump's tariffs may persist long-term, and the opportunity for a good agreement remains slim.

While Trump made these comments, French President Emmanuel Macron, who was visiting Vietnam, warned students about the consequences of "superpower impulsive actions," criticizing Trump's tariff policies as "entirely mood-dependent."

German Chancellor Merkel also took a tough stance, stating that if the trade conflict escalates, the EU might retaliate against American tech companies.

According to The Guardian, following Trump's U-turn on EU tariffs, Brussels is urgently reviewing the scale of direct European investments in the U.S. and requesting detailed descriptions of investment plans from major European enterprises and CEOs.

Insiders revealed that members of "Business Europe," a consortium of 42 business associations, received questionnaires from the EC on Monday, being asked to provide information about upcoming investments in the U.S. and noting "urgency" for replies.

A similar notice was sent to the "European Round Table of Industrialists," including 59 CEOs and executives from leading European enterprises such as ASML, BASF, SAP, BMW, and Mercedes-Benz. They were requested to provide company investment plans over the next five years. The notice particularly noted that the request came directly from von der Leyen.

The报道称, the overall data on EU investment plans could become a key bargaining chip in negotiations with Washington.

"Looking ahead, the dance of trade between the EU and the U.S. is like a high-stakes tango, with July 9th being the next potential flashpoint," said Naeem Aslam, CEO of London-based investment firm Zaye Capital Markets. "Companies should 'fasten their seatbelts,'" he added.

"This game is far from over," he concluded.

This article is an exclusive piece by the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7509308119832937001/

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