The U.S. President “Accepts the Extension” Requested by von der Leyen and Backtracks. First Direct Contact Between the Two Since Trump’s Return to the White House. European Markets Rally.
Another step back from Donald Trump on tariffs targeting EU goods. Following an unexpected threat to impose 50% tariffs on all imports starting June 1, the U.S. President yesterday (May 25) received a phone call from Ursula von der Leyen. The EU leader reportedly persuaded him—although caution is warranted—to freeze reciprocal tariffs and keep the dialogue open until July 9, thus reaffirming the 90-day extension agreed upon on April 9.
“A good call,” von der Leyen described it—the first direct contact since the tycoon’s return to the White House. “The European Union and the United States maintain the world’s closest and most important trade relationship. Europe is ready to advance negotiations swiftly and decisively. In order to reach a solid agreement, we will need time until July 9,” the European Commission President stated in a post on X. On the other end of the line, Trump “agreed to the extension” requested by von der Leyen. “It was my privilege to do so. The Commission President said talks would begin quickly. Thank you for your attention to this issue!” he wrote on his platform, Truth Social.
In reality, EU countries are still subject to reciprocal 10% tariffs on all exports to the U.S., as well as 25% duties on steel, aluminum, derivatives, cars, and car parts.
The positive takeaway is that—for the first time—Washington and Brussels have established direct engagement at the highest level on the issue. “It’s thanks to Italy that this direct von der Leyen–Trump contact took place,” Italian Foreign Minister Antonio Tajani was quick to point out this morning. In an attempt to safeguard the mediator role she has skillfully carved out—and which now appears threatened by the direct channel between the two leaders—Prime Minister Giorgia Meloni is said to be stepping up diplomatic efforts to orchestrate a European summit before the D-Day deadline.
Whether Rome’s role is actual or perceived, the phone call and the immediate statements from both Trump and von der Leyen have injected a dose of optimism. This was reflected in the European stock markets, which opened sharply higher today: Frankfurt’s DAX rose by 1.76%, Paris’s CAC 40 by 1.36%, and Milan’s FTSE MIB by 1.53%.
The ball is now back in the court of Maroš Šefčovič, the European Commissioner for Trade, who leads the complex negotiations with the American counterparts. So far, the Slovak socialist has returned empty-handed from each visit to Washington: the most recent round on Friday (May 23) ended with Trump furiously announcing a doubling of tariffs on EU imports compared to what had been foreseen on “Liberation Day,” along with the comment: “Our talks with them are going nowhere!”
Šefčovič himself voiced his frustration after meetings with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, stating that trade between the EU and the United States “must be based on mutual respect, not threats,” and adding that Brussels “is ready to defend our interests.”
The European Commission has already outlined a Plan B in the event negotiations collapse: countermeasures targeting a long list of U.S. products worth €95 billion, and formal proceedings against Washington at the World Trade Organization. But Brussels also has an ace up its sleeve: the anti-coercion instrument, which could allow it to heavily tax the profits of American big tech companies operating in Europe. The Commission has announced that Šefčovič will hold a new phone call with Lutnick this afternoon.