EU defies U.S. threat as Trump extends tariff deadline to July 9

U.S. President Donald Trump said on Sunday that he would pause his threatened 50 percent tariffs on the European Union until July 9, after a "very nice call" with EU chief Ursula von der Leyen.

Trump had threatened on Friday to invoke the steep tariffs as soon as June 1, saying talks with the EU over his previous levies were "going nowhere."

Von der Leyen "just called me ... and she asked for an extension on the June 1 date, and she said she wants to get down to serious negotiation," Trump told reporters before boarding Air Force One in Morristown, New Jersey.

"And I agreed to do that," he added.

EU stands firm against U.S. 'provocations'

Brussels and Washington have been negotiating in a bid to avert an all-out transatlantic trade war, and had agreed to suspend tariff action on both sides until July. But Trump's threat on Friday dramatically raised the stakes.

The U.S. leader said on Friday that the European Union was "very difficult to deal with" and "our discussions with them are going nowhere." He later told reporters: "I'm not looking for a deal – we've set the deal." He also repeated his view that the bloc was created to "take advantage" of the United States.

German Finance Minister Lars Klingbeil on Sunday called for "serious negotiations" with Washington, saying he had spoken with his U.S. counterpart Scott Bessent about the matter.

"We don't need any further provocations, but serious negotiations," Klingbeil, who is also Germany's vice chancellor, told Bild newspaper. "The U.S. tariffs endanger the U.S. economy just as much as the German and European economy," Klingbeil warned.

European politicians had expressed disappointment at the threat of further tariffs from the U.S.

The EU's trade chief Maros Sefcovic said the bloc was "committed to securing a deal" but that trade ties should be based on "mutual respect, not threats."

Micheál Martin, the Irish taoiseach, said Trump's suggestion was "extremely disappointing," adding that "tariffs are damaging to all sides."

In a statement posted on X, he said: "Tariffs at the level suggested would not only push prices up, they would grievously damage one of the world's most dynamic and significant trading relationships, as well as disrupting wider global trade. We do not need to go down this road. Negotiations are the best and only sustainable way forward."

The head of the EU's trade committee, the German MEP Bernd Lange, has threatened to apply counter-tariffs against the U.S. "We will not allow ourselves to be pressured and will objectively attempt to begin negotiations next week," he said in comments reported by the German Die Welt newspaper.

He warned that, "If the negotiations are unsuccessful, the European Union is strong enough to implement countermeasures, such as counter-tariffs, to offset the economic damage."

Tariffs endanger U.S. and European economies

The EU is one of the U.S.'s largest trading partners. According to U.S. government figures, the bloc exported more than $600 billion in goods to the U.S. last year and bought $370 billion in return. This left the U.S. with a trade deficit in goods totaling $236 billion.

However, when services are taken into account, where U.S. firms are dominant, the European Commission estimates that the overall U.S. trade deficit with the EU was €50 billion ($57 billion).

The Trump administration has hit the bloc with three sets of tariffs: it imposed a 20-percent "reciprocal" rate on most EU goods from April 2, which has been suspended pending talks, though a baseline 10 percent remains in force. It also kept 25 percent import taxes on steel, aluminium and vehicle parts in place and has threatened similar moves on pharmaceuticals, semiconductors and other goods.

In response, Brussels has announced plans to impose tariffs on nearly €100 billion ($113 billion) worth of U.S. products if talks fail to yield an agreement.

On May 19, the European Commission published a report estimating the potential impact of U.S. tariff hikes. While it projects a moderate negative effect on EU GDP, the report warns of significant harm to the U.S. economy – citing higher consumer prices, weaker domestic demand, falling exports and declining investor confidence. It also noted that retaliatory measures from the EU and other trade partners would further worsen the U.S. economic outlook.

A recent Harris Poll conducted for Bloomberg News reveals that more Americans are bracing for economic headwinds amid growing concerns over U.S. trade policy. Conducted between May 8 and 10 among roughly 2,100 adults, the survey found that 69 percent of the respondents expect tariffs to drive up the cost of everyday goods, while half believe the economy has deteriorated since 2024.

With economic uncertainty looming, many Americans are tightening their belts. The Bloomberg survey showed that 60 percent of respondents said they've already cut back on spending, and another 16 percent expect to do so soon. Among those reducing their expenses, over 70 percent are eating out less, and 57 percent are spending less on entertainment.

Economists are increasingly worried that the aggressive U.S. tariff strategy could trigger a significant slowdown. According to economists polled by Reuters in April, the median probability of U.S. economic recession in the next 12 months approached 50 percent.

And J.P. Morgan predicted in late April that there was a 60-percent chance of a recession due to the tariffs. The bank maintained that forecast even after Trump announced a 90-day pause on most U.S. reciprocal tariffs.

(With input from agencies)