Global markets hold breath as Trump draws out EU trade talks
Donald Trump has global investor sentiment hanging on his every word once again, as European markets rallied on Monday after the President retreated on his latest tariff tirade against the European Union.
Trump agreed to extend his trade talks deadline with the EU by over a month, which comes after he threatened to slap a 50 per cent levy on the 27-state bloc on Friday.
In a post on Truth Social, the President said he was pushing the deadline to July 9 after a “very nice” call with President of the European Commission Ursula von der Leyen.
Markets in Europe opened in the green on the news.
In afternoon trading, Germany’s Dax had jumped 1.42 per cent and the Cac 40 in Paris and Amsterdam’s AEX nearly one per cent.
In a post of her own, Von der Leyen said: “The EU and US share the world’s most consequential and close trade relationship. Europe is ready to advance talks swiftly and decisive.”
But the European Commission’s chief said the EU would “need the time until July 9” in order to reach a good deal.
The fresh deadline puts negotiations back on a similar time frame as prior to Trump threatening the 50 per cent rate, which was July 8.
Speaking to reporters on Sunday, Trump said Von der Leyen “wants to get down to serious negotiations” and had vowed to “rapidly get together and see if we can work something out”.
Trump’s threats reignite fears
The FTSE 100, which was closed on Monday for the bank holiday, is expected to rise on Tuesday after closing off 0.24 per cent following Trump’s latest tariff twist on Friday. The blue-chip index shed around one per cent after Trump said he was “recommending” a 50 per cent rate on the EU.
Markets on Wall Street were also closed on Monday to commemorate US’ Memorial Day.
In New York, the S&P closed off 0.67 per cent and the Dow Jones 0.61 per cent on Friday. The tech-heavy Nasdaq fell one per cent.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Trump’s latest threats are also reigniting some fears about where other negotiations may end up.
“Time is ticking on the pause brokered between the US and China, but more onerous duties could still descend on Chinese goods.”
The EU has been one of Trump’s top targets since his ‘Liberation Day’ levies at the beginning of April.
The President slammed the bloc as one of the “worst offenders” and repeated his view that the European states “banded together to take advantage of [the US].”
Von der Leyen has raised concerns on trade in cars and agricultural goods in the wake of Trump’s policies. Whilst some tariffs have been rolled back, a 25 per cent levy on EU steel and aluminium remains in tact.
Elsewhere on Friday, Trump warned tech giant Apple he would impose “at least” a 25 per cent import tax on iPhones not manufactured in America. He later widened the threat to all smartphones.