Stock Markets Gain Following Trump's Extension of EU Tariff Deadline

What Happened?

Stock markets experienced a jump on Tuesday following President Donald Trump's reversal of a deadline for imposing tariffs on the European Union.

Over the Memorial Day weekend, President Trump granted an extension to the EU’s deadline until July 9 to avoid a sweeping 50% tariff measure.

Trump’s announcement to delay steep tariffs came on Sunday after a phone call with the European Commission President Ursula von der Leyen.

The move will allow more time for the Trump administration to strike a deal with the 27-country bloc.

Following the extension, the Dow Jones traded 523 points higher, and the S&P 500 gained as much as 1.6%, according to reports.

Europe’s regional Stoxx 600 index also extended gains, last trading up 0.55% from the previous session.

Trump took to Truth Social on Tuesday to explain, that while he was satisfied with the 50% tariff allotment, he was informed that the EU had touched base 'to quickly establish meeting dates.'

'This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America,' Trump stated. 'They will BOTH be very happy, and successful if they do!!!'

Why it Matters

Trump recommended the 50% levies that would have begun on June 1 after complaining trade negotiations with the EU had recently stalled.

In a previous post on Truth Social, Trump suggested the EU has 'been very difficult to deal with' and that trade discussions were going nowhere.

He pointed to things such as VAT taxes, corporate penalties, non-monetary trade barriers, monetary manipulations, and lawsuits against American companies that have led to a trade deficit with the U.S. of more than $250,000,000 a year.

Trump has also criticized American tech giant Apple after he threatened to impose at least 25% levies on Apple's iPhones over non-U.S. manufacturing.

The EU's chief trade negotiator Maros Sefcovic told reporters on Monday that the bloc was 'fully committed' to reaching an agreement with the U.S. by the July deadline.

So far, it marks new momentum for Trump, who recently celebrated preliminary trade deals with the U.K. and China.

China and the U.S. agreed to roll back on each other's trade levies for an initial 90-day period to de-escalate a global trade war.

How it Affects You

Global markets are shortly feeling a renewed sign of relief from the economic uncertainty and instability amid Trump’s trade policies.

It allows the European Union and U.S. officials to establish a new footing as President Trump aims to crack down on U.S. global trade imbalances.

But it's unclear if this news from the EU changes things with Apple.

Apple's CEO Tim Cook had reportedly said that Apple, to pay a lower tariff, would relocate production for the U.S. to India from China.

National Economic Council Director Kevin Hassett told CNBC that the Trump administration does not want to 'harm Apple' with tariffs.

But if production is shifted, some estimates predict a U.S.-made iPhone could cost up to $3,500.