Europe delays tariff countermeasures

The European Union said on Sunday it would extend its suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement as US President Donald Trump's administration demanded more concessions from trading partners.

- JULIA PAYNE

Trump said on Saturday he would impose a 30% tariff on most imports from the EU and Mexico from Aug 1, adding to similar warnings for other countries and leaving them less than three weeks to hammer out framework deals that could lower the threatened tariff rate.

White House Economic Adviser Kevin Hassett said on Sunday that countries’ trade deal offers so far have not satisfied Trump and “the tariffs are real” without improvements.

“The president thinks that deals need to be better,’ Mr Hassett told ABC's This Week news show. “And to basically put a line in the sand, he sent these letters out to folks, and we'll see how it works out.”

Ursula von der Leyen, head of the EU’s executive Commission, which handles trade policy for the 27 member states, said the bloc would maintain its two-track approach: keep talking and prepare retaliatory measures.

“We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now,” Ms von der Leyen told a news conference, adding that the bloc would extend its halt on countermeasures until August.

Von der Leyen’s decision to resist immediate retaliatory measures points to the European Commission’s desire to avoid a spiralling tit-for-tat escalation in the trade war while there remains a chance of negotiating an improved outcome.