The U.S. President Donald Trump has extended the deadline for tariff negotiations with the European Union to July 9, averting a potential escalation in trade tensions.

The decision follows a productive call with European Commission President Ursula von der Leyen on Sunday, who described the discussion as constructive.

Trump, speaking to reporters, said von der Leyen committed to working quickly toward a trade agreement. He later posted on Truth Social, calling it his "privilege" to extend the deadline. The move delays a threatened 50% tariff hike on EU goods, initially set for June 1, after Trump proposed a 20% import tax in April, later lowered to 10% to encourage talks.

Von der Leyen emphasized the EU’s readiness to secure a “good deal” by the new deadline, while EU trade chief Maros Sefcovic stressed the importance of mutual respect in negotiations. Sefcovic, after discussions with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, reiterated the EU’s commitment to a fair solution but warned of defensive measures if needed.

The U.S.-EU trade relationship, with over $600 billion in EU exports to the U.S. and $370 billion in U.S. exports last year, remains critical. Trump has criticized the trade balance as unfair, defending his tariff strategy as a boost for American manufacturing. However, economists warn that higher tariffs could drive inflation and raise consumer costs, particularly in automotive and agricultural sectors.

While some tariffs are paused, a 25% U.S. tariff on EU steel and aluminum persists. The EU, in response, has considered a 25% tariff on €18 billion of U.S. goods and is exploring measures targeting an additional €95 billion in U.S. imports.

European leaders, including those in France and Germany, advocate diplomacy to avoid a trade war that could harm both economies. With weeks until the July 9 deadline, U.S. and EU officials face mounting pressure to resolve differences and prevent a costly transatlantic trade conflict. (ILKHA)