In a significant diplomatic maneuver, the European Union (EU) has decided to temporarily suspend its retaliatory measures against American steel and aluminum tariffs. This pause affects approximately 21 billion worth of U.S. imports and is set to last for a duration of 90 days. The EU's intention is to create a favorable environment for negotiating a mutually beneficial trade agreement with the United States.

This development comes in response to U.S. President Donald Trumps recent decision to hold off on imposing tariffs on several countries that exceed a universal 10 percent duty. Trump indicated that any countries yet to impose retaliatory measures, including EU member states, would benefit from this temporary tariff standstill.

Ursula von der Leyen, the President of the European Commission, expressed optimism regarding the negotiations, stating, We want to give negotiations a chance. She also clarified that should the discussions not yield satisfactory results, the EU would be prepared to activate its countermeasures promptly. This dual approach reflects the EU's commitment to explore diplomatic solutions while maintaining a defensive posture.

Initially, President Trump had introduced an additional 10 percent reciprocal tariff on all EU imports, adding to the standard 10 percent import duty that has long been in effect. However, it is important to note that separate tariffs imposed by the U.S. on cars, steel, and aluminum imports from the EU, which stand at 25 percent, will continue to be enforced.

Prior to this pause, Brussels had been preparing to implement retaliatory tariffs that would impact a wide array of goodsincluding poultry, clothing, and various metal products. These measures were slated to commence next week, but the European Commission announced on Thursday its decision to halt these plans to allow for further negotiations.

EU trade spokesperson Olof Gill emphasized that the EU is ready to make deals and believes that a win-win trade agreement is achievable. He further explained, During negotiations, everything is on pause, indicating that the EU is taking a cautious yet proactive approach during this critical period.

The consensus to delay the countermeasures was reached by 26 out of the 27 EU member states during a meeting on Wednesday, with Hungary being the lone dissenting voice. The EU's legal framework will still permit the adoption of retaliatory measures, but their implementation has been suspended, providing the EU with the ability to re-activate them swiftly if negotiations falter.

In addition to the current pause on tariffs, Brussels is exploring alternative retaliatory measures. President von der Leyen assured that all options remain on the table, indicating that the EU is prepared to respond flexibly to any developments. Gill also mentioned that EU Trade Commissioner Maro efovi had engaged in discussions with U.S. Commerce Secretary Howard Lutnick earlier in the week, but there are no scheduled in-person meetings with U.S. officials at this time.