In a diplomatic breakthrough that offers a reprieve for strained transatlantic relations, the European Union has welcomed U.S. President Donald Trump's decision to suspend newly imposed tariffs on several countries for 90 days. In response, the EU announced it will pause its own planned countermeasures, which were poised to target approximately €21 billion ($23.25 billion) worth of American imports.

European Commission President Ursula von der Leyen hailed the move as a crucial step toward restoring trade stability, stating, "We want to give negotiations a chance." The decision comes amid heightened concerns in global markets, following a period of volatility triggered by tariff hikes and fears of a full-blown trade war.

The U.S. administration’s temporary tariff freeze has helped calm markets rattled by earlier economic policy signals, offering relief to global investors. The S&P 500 saw a dramatic 9.5% rally, while Japan’s Nikkei index also jumped nearly 9%, underscoring investor optimism.

However, while the suspension de-escalates trade tensions with Europe and other allies, the U.S. has simultaneously taken a harder stance against China. Washington raised tariffs on Chinese imports to a staggering 125%, intensifying the economic confrontation with Beijing. China has already imposed tariffs of 84% on American goods and threatened further retaliation, condemning the new measures as aggressive and destabilizing.

The Trump administration insists the tariff increases on China are meant to address long-standing trade imbalances and intellectual property concerns. While Trump has left the door open for a potential trade deal with Beijing, U.S. officials have indicated a greater focus in the short term on strengthening ties with countries like Japan, Vietnam, and South Korea.

Notably, several tariffs remain in place despite the suspension, including a 10% blanket duty and specific levies on steel, aluminum, and autos. Additionally, tariffs tied to fentanyl production rules, negotiated as part of trade agreements with Canada and Mexico, remain active.

While the EU’s response has injected some optimism into the global trade landscape, economists and policymakers caution that the underlying tensions—especially between the U.S. and China—pose ongoing risks to economic stability. The coming weeks are expected to be critical in determining whether this pause leads to meaningful dialogue or simply postpones further confrontation.