President Donald Trump agreed to extend the trade negotiation deadline with the European Union to July 9 after a phone call with European Commission President Ursula von der Leyen. Following the announcement, U.S. stock futures rebounded, while gold prices declined.

Trump Delays Tariff Threat

Trump confirmed the extension while speaking to reporters on his way back to Washington. He described the call as “very pleasant” and stated, “I agreed to pull it back.”

Earlier, von der Leyen posted on X (formerly Twitter) that Europe is “ready to move forward quickly and decisively” in negotiations but emphasized that reaching a fair deal requires time. The new deadline aligns with the expiration of Trump’s initial 90-day suspension of retaliatory tariffs.

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EU Seeks Compromise Amid Rising Tensions

Von der Leyen’s office confirmed she initiated the call, marking the first publicly disclosed discussion between the two leaders since Trump took office. The move suggests the EU may be shifting toward seeking a compromise.

In April, the U.S. announced a 20% tariff on EU goods. However, Trump escalated tensions last Friday by threatening to raise tariffs to 50%, citing slow progress in negotiations and accusing the EU of unfairly targeting U.S. companies through legal actions and regulations. The threat marked a significant escalation in the long-standing trade dispute, catching European negotiators off guard.

EU Responds with New Proposal

The EU recently shared a revised trade proposal with the U.S. to revive talks. Maroš Šefčovič, the EU’s trade chief, spoke with U.S. trade representative

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Jamieson Greer on Friday, urging “mutual respect instead of threats.” Šefčovič stressed Brussels would “defend our interests” in response to Trump’s aggressive stance.

Following Trump’s tariff warning, U.S. Treasury Secretary Steven Mnuchin remarked on Fox News, “I hope this lights a fire under the EU.”

Frustration Over Lack of Progress

A White House official expressed frustration, stating the EU had not engaged as actively as other nations. “We just haven’t seen any real movement from the EU,” the official said.

Stephen Moore, an external economic adviser to Trump, viewed von der Leyen’s statement as a “hopeful sign” that the EU is ready to negotiate. However, he noted progress might not be as swift as Trump desires.

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Economic Impact of Tariff Threats

According to Bloomberg Economics, Trump’s latest tariff threat could affect $321 billion in U.S.-EU trade, potentially reducing U.S. GDP by nearly 0.6% and increasing prices by over 0.3%.

Market Reactions

Following the extended negotiation window, U.S. stock futures rose in early Monday trading, with the Nasdaq gaining up to 1%. Meanwhile, spot gold prices fell by 15, dropping to 3,341 per ounce.

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