The European Union decided at the last minute to halt the escalation of the trade war with the United States. European Commission president Ursula von der Leyen announced that Retaliation duties on US goods worth €21 billion will be suspended by early August. They were originally to enter into force in the coming hours, which threatened to exacerbate transatlantic economical relations rapidly. This decision gives diplomats additional time to negotiate, but tension remains high. The dispute, which began inactive during the Donald Trump administration, concerns US tariffs on European steel and aluminum. Brussels stresses that although it is holding back, it is full ready to face if talks with Washington neglect to deliver the expected results. It is simply a strategical pause that can decide on the form of global trade in the coming months.
What precisely does suspension mean? Rates and goods under pressure
The decision to suspend retaliatory measures concerns the tariff package, which was to be a direct consequence from the European Union to the inactive applicable US steel and aluminium duties. The value of goods from the USA to be covered by the fresh rates is estimated at impressive €21 billion. The duties planned were to scope up to 25 percent, which in practice would mean a drastic increase in the prices of many American products on the European market. Although the authoritative list has not yet been finalised, in erstwhile rounds of akin disputes on the Brussels mark there were specified iconic products as Harley-Davidson motorcycles, Levi’s jeans, Kentucky bourbon, or Florida orange juice. The impact on these goods has not only an economical dimension, but besides a symbolic dimension, aiming at products powerfully associated with circumstantial US states.
The suspension of these actions by the beginning of August is simply a motion of goodwill aimed at deescalating the conflict. However, it should be stressed that this is simply a unilateral movement. The United States has not withdrawn from its tariffs for European steel (25%) and aluminium (10%), which are the origin of the full dispute. This means that European producers inactive bear the cost of American protectionist policy, while the EU gives Washington more time to find a diplomatic solution. This asymmetry shows how complicated the current situation is and how much depends on the result of the forthcoming talks.
"We are full prepared." Position of the European Commission
During a press conference in Brussels, Ursula von der Leyen utilized a language that was to be both calm and firm. Her words: “We are full prepared”It's a clear signal sent across the ocean. They mean that suspension of duties is not a sign of weakness but a strategical manoeuvre. The European Commission is working intensively on further, possibly even more severe, retaliatory measures that could be launched if the August deadline passes without agreement. This is simply a classical diplomacy based on the “kids and carrots” strategy – the Union offers a chance for dialog (carrot) while showing that it has tools to exert force (carrot).
The nonsubjective of Brussels is to accomplish a sustainable solution that will abolish US steel and aluminium duties without the request to introduce its own tariffs. Experts stress that the current pause is to give administration time in Washington for interior consultation and the improvement of a position. Donald Trump's return to the political phase further complicates the situation, as he was the initiator of the first conflict. The European Union must so balance its willingness to cooperate with the request to defend the interests of its manufacture and the single market.
France is pushing for a tough answer. Tensions within the Union
The decision to suspend retaliation shall not be unanimously supported by all associate States. The loudest critic of the mild course is France. president Emmanuel Macron in fresh days publically called for an immediate and decisive response for American trade policy. Paris considers that the hold in introducing duties is seen in Washington as a weakness and encourages further protectionist action. The French position is based on the belief that the European Union must build its "strategic autonomy" and be able to defend its interests hard, even at the expense of short-term tensions with a historical ally.
This interior dispute shows a fundamental difference in the approach to intra-EU trade policy. On the 1 hand, countries specified as Germany, whose economy is heavy dependent on exports, like negotiating solutions and avoiding escalation. On the another hand, France and respective another countries are seeking a more assertive attitude to show that the EU is an equal partner on the global stage. The final decision of the European Commission is so a compromise that tries to reconcile these different perspectives, giving time for diplomacy, but at the same time does not exclude a more severe consequence in the future.
The consequences for Poland and Europe. What's waiting for us after August?
Although the dispute is on the Brussels-Washington line, its effects can be felt throughout Europe, including Poland. If suspended duties were to enter into force, Polish consumers would gotta anticipate higher prices of any American products. More importantly, the escalation of the trade conflict could negatively affect Polish companies. American retaliation could hit Polish exports, and global uncertainty would harm supply chains and the overall economical situation.
The coming weeks will be crucial. There are 2 main scenarios on the table. Optimistic scenario assumes that diplomats will be able to scope an agreement whereby the US will abolish or importantly reduce its duties on steel and aluminium and that the EU will permanently waive its retaliatory plans. This would be a return to more predictable trade relations. Pessimistic scenario This is simply a failure of the EU to discuss and to impose retaliatory duties after early August. This in turn could trigger a spiral of reciprocal tariffs, leading to a full-scale trade war, the cost of which would be borne by both sides of the Atlantic. For Poland, as a country with an open and dynamic economy, stableness in global trade is crucial. The August deadline will so be a date, which will be carefully observed not only by politicians but besides by entrepreneurs.
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The European Union has decided. work of €21 billion withheld until August!
