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LAST UPDATE | 10 Apr
THE EU HAS paused plans for retaliatory tariffs on US goods this afternoon after Donald Trump abruptly suspended higher US duties on the bloc and other countries.
European stock markets bounced back sharply this morning after the US president unexpectedly paused the bulk of his newly-imposed tariffs, providing a moment of relief to world leaders rattled by days of financial turbulence.
The surprise move came just hours after steep duties had come into force on dozens of countries, including traditional US allies.
The turmoil had wiped trillions off global equities and triggered a sharp spike in US government bond yields, a shift that seemingly caught the US president’s attention.
After repeatedly insisting there would be no change in his tariff policy, Trump blinked last night when he dramatically cut tariffs on all countries to 10% for 90 days.
This means that 20% tariffs on Ireland and the EU have been reduced for the next three months.
The European Union welcomed Trump’s U-turn, saying it was an “important step towards stabilising the global economy”.
The bloc responded with its own olive branch, suspending for 90 days tariffs on 20 billion euros’ worth of US goods that had been greenlit in retaliation to duties on steel and aluminium.
However, Trump confirmed that a punishing 125% tariff would remain in place on Chinese imports, signalling a continued hard line against Beijing amid simmering trade tensions.
Taoiseach Micheál Martin welcomed the tariffs pause, but warned that “we’re far from out of the woods”.
Speaking on RTÉ’s Claire Byrne show, he said that the European Union had responded appropriately and that he hoped that a negotiated settlement could be reached in the near future.
“It was quite scary yesterday in terms of what was happening both on the bond market and in terms of stocks,” said Martin, implying that it had been a factor in Trump’s decision to pause tariffs.
“There is now an opportunity to get this on a negotiating path… which would give us a safe and sustained landing zone, but we’re a long way from that,” he added.
Martin also confirmed that a seperate US tariff on the global pharmaceutical industry is still likely, but claimed that major pharma organisations are putting pressure on Trump’s administration.
Martin added that at the moment, “the only certainty is uncertainty”.
“We don’t believe in tariffs, but I do believe there’s a sustained way of trying to get something (from negotiations) that would satisfy the US side but equally mean a sustainable pharmaceutical industry in Europe,” he said.
Across Europe, stock markets rebounded sharply this morning – Frankfurt jumped more than 8% in early deals, while Paris gained 6.4% and London surged 6.3% following rallies on Wall Street and in Asia.
Dublin’s ISEQ index jumped 3.4% in early trading, with shares in Bank of Ireland, Ryanair, and Kingspan all climbing by more than 10%.
Trump’s sudden reversal follows a wave of market volatility not seen since the early stages of the Covid-19 pandemic.
Trump told reporters the decision to pause the tariffs “came together” yesterday morning, and that a Truth Social post detailing the pause was written “from the heart”.
European Commission president Ursula von der Leyen welcomed Trump’s decision to pause planned tariff increases as an “important step towards stabilising the global economy”.
“While finalising the adoption of the EU countermeasures that saw strong support from our member states, we will put them on hold for 90 days,” she added.
“Clear, predictable conditions are essential for trade and supply chains to function,” the EU bloc leader said in a statement this morning.
“The European Union remains committed to constructive negotiations with the United States,” she said, reiterating the bloc’s offer of a bilateral tariff exemption for cars and other industrial goods.
This afternoon, von der Leyen stressed that the EU nations “want to give negotiations a chance.”
She warned, however, that “if negotiations are not satisfactory, our countermeasures will kick in” and that all options remain on the table.
In a statement this morning, Simon Harris stated that it has been his “consistent position,” as well as that of the Irish Government and the European Union, that “meaningful, calm, and measured dialogue” with the US is essential.
The Tánaiste discussed his recent US visit with EU Trade Commissioner Maros Sefcovic this morning, briefing him on his meeting with Lutnick.
EU trade spokesperson Olaf Gill said this morning that EU officials had warned “since the start of this alarming tariff saga that it would lead to turmoil”.
Speaking on RTÉ’s Morning Ireland, Gill said it was too early to tell if the EU will pull back its countermeasures to Trump’s steel and aluminium tariffs, and described the situation as “volatile”.
“Whether we proceed on that basis remains to be seen – we’re going to take the time we need to assess this internally,” Gill said.
“From the get go in this whole saga, we said that what we’re interested in negotiations with Americans – reducing tariffs, even eliminating them, not allowing them to escalate. That remains the case.”
Trump was asked about the countermeasures adopted by the EU yesterday – the bloc announced that it was retaliating against Trump’s global steel and aluminium tariffs, but those countermeasures were not in response to the other US tariffs that came into effect yesterday.
Trump appeared surprised at the question and said he hadn’t heard about it, saying “That’s bad timing”.
He then turned to his Commerce Secretary Howard Lutnick, who told him the measures had yet to come into effect and that he expected them to be delayed.
Trump said: “I’m glad they held back.”
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