In a dramatic reversal that underscored the volatility of transatlantic trade relations, US President Donald Trump has decided to delay the imposition of steep new tariffs on European Union goods until July 9, granting negotiators a temporary reprieve as talks between Washington and Brussels continue to stall.

The announcement, made on May 26, came just two days after Trump threatened to slap a punitive 50% tariff on EU imports starting June 1, citing frustration over the slow pace of negotiations. That threat had sent shockwaves through global financial markets and reignited fears of a renewed trade war between the long-time allies. But following a phone call with European Commission President Ursula von der Leyen, Trump agreed to restore his original July 9 deadline, providing a brief window for potential compromise.

The decision sparked an immediate relief rally in European financial markets. The euro rose to its highest level against the US dollar since April 30, while the pan-European STOXX 600 index gained 1%, recovering from a 0.9% decline on May 23 following Trump’s initial tariff threat. Automakers, luxury brands, and banks led the rebound, with the automobiles and parts index climbing 1.4%. Luxury stocks – which depend heavily on US consumer demand – also posted strong gains, as investors grew more optimistic that a full-scale tariff escalation could still be avoided.

Oil prices edged higher as well, buoyed by improved investor sentiment and hopes that a trade détente might support broader global growth.

Trump’s abrupt back-and-forth on tariffs has become a hallmark of his........

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