The European Union has expressed cautious optimism following the U.S. President Donald Trump’s decision to implement a 90-day pause on reciprocal tariffs, a move aimed at stabilizing global markets. European Commission President Ursula von der Leyen described the pause as “an important step towards stabilizing the global economy,” emphasizing the need for clear and predictable trade conditions.
While the EU applauds the temporary halt, WTO Director-General Ngozi Okonjo-Iweala has issued a stark warning about the broader implications of escalating trade tensions between the United States and China. She highlighted the risk of the global economy fragmenting into two blocs centered around the U.S. and China, which could lead to a long-term reduction in global GDP by nearly seven percent.
Von der Leyen reiterated the EU’s commitment to diversifying trade partnerships and fostering frictionless commerce within its single market. However, she remained silent on whether the EU would proceed with its own retaliatory measures against U.S. tariffs.
Okonjo-Iweala urged WTO members to address these challenges through cooperation and dialogue, stressing the importance of preserving the openness of the international trading system.