July 9 becomes new flashpoint as analysts warn of prolonged uncertainty and risk of escalation
US President Donald Trump has agreed to postpone a planned 50% tariff on European Union goods, pushing the deadline from 1 June to 9 July after a weekend call with European Commission President Ursula von der Leyen.
European markets rebounded Monday, recovering from Friday’s steep declines triggered by Trump’s tariff threats. Paris and Frankfurt rose more than 1%, while US futures edged higher in holiday-thinned trading. Yet observers remain cautious, noting the delay does little to reduce the underlying volatility driving global economic uncertainty.
“Buckle up; this ride’s far from over,” said Naeem Aslam, chief investment officer at London-based Zaye Capital Markets. “The EU-US trade dance is a high-stakes tango, with July 9 as the next flashpoint.”
Trump’s pivot: From 1 June threat to July 9 extension
The tariff drama intensified last week when Trump accused the EU of being “very difficult to deal with” and declared that negotiations were “going nowhere,” warning of a straight 50% tariff starting 1 June. The move followed months of shifting rhetoric from the White House, which had already imposed and revised a series of tariffs under its “reciprocal” trade agenda — initially setting a 20% rate in April, later lowered to 10% during a 90-day negotiation window.
Trump reversed course on Sunday, announcing the delay after what both sides described as a “very nice call.” Von der Leyen said the EU needed until 9 July to reach a meaningful agreement. “Europe is ready to advance talks swiftly and decisively,” she wrote on X. Trump echoed the sentiment: “We will rapidly get together and see if we can work something out.”
Political will—or policy theatre?
The delay has opened a narrow window for diplomacy, but analysts remain sceptical about how much progress can realistically be made in six weeks.
“It should be enough to get the framework of an agreement in place,” said Holger Schmieding, chief economist at Berenberg, citing the US–UK deal as a potential model. He floated the possibility of a 10% tariff with minimal EU retaliation and some details to be resolved after July 9. However, he warned that if the final US position involved blanket tariffs of 20–30%, the EU would have “no choice” but to impose “significant countermeasures.”
Schmieding also described Trump’s tactics as “shock-based,” noting the president’s tendency to apply pressure in dramatic bursts to force concessions. But he cautioned that the EU would not fold under such tactics. “We have to remember our market is big. These negotiations should be negotiations among equals.”
EU response: Composure, offers, and contingency plans
EU leaders have sought to keep the tone conciliatory. Von der Leyen’s spokesperson confirmed both parties had agreed to “fast-track” trade negotiations and maintain regular contact. French President Emmanuel Macron voiced support for reaching “the lowest possible” tariffs to enable “fruitful exchanges.” Italian Prime Minister Giorgia Meloni is reportedly working to organise a June meeting between Trump and European leaders, while Ireland’s Foreign Minister Simon Harris said there was “no time to waste” in finding a mutually beneficial deal.
Behind the scenes, the European Commission has revived its “zero-for-zero” proposal to eliminate industrial tariffs and expand cooperation on digital and security-related trade. Offers reportedly include increased EU purchases of American liquefied natural gas, arms, soybeans, and possibly hormone-free beef. Brussels also reiterated its willingness to address specific regulatory burdens, but officials maintain that European food safety, digital, and tax standards are not open to blanket overhaul.
The EU has suspended retaliatory tariffs on US$21bn worth of goods but warned they will automatically take effect on 14 July without a deal. Additional levies targeting US$95bn in goods—including bourbon, cars, and tech products—are being prepared. While the US goods trade deficit with the EU reached nearly €200bn in 2024, the EU also runs a €109bn surplus in services.
Strategic uncertainty remains
For some observers, the greatest concern is not the tariffs themselves, but the broader unpredictability of US demands.
“It’s very unclear what exactly the U.S. President wants,” said Guntram Wolff, senior fellow at Bruegel. “The EU has made proposals, but it doesn’t really know what the president wants.” He added that the EU’s moderate approach — somewhere between the UK’s concessions and China’s hardline stance — was sound, but might not be enough in the face of Trump’s shifting objectives.
