Markets across Europe opened higher after U.S. President Donald Trump postponed a proposed hike in tariffs on European goods. The Stoxx Europe 600 Index gained 0.8% by early Monday trading, led by technology and industrial sectors, following a weekend phone call between Trump and European Commission President Ursula von der Leyen.
The call resulted in a new deadline—July 9—for the proposed 50% tariffs. The move temporarily relieves pressure on the European Union, which had been facing escalating trade tensions after Trump’s threat to more than double levies starting June 1. On Friday, markets had fallen sharply on fears of an impending trade war.
“Investors are getting to know the Trump tariff playbook quite well,” said Tim Waterer, chief market analyst at KCM Trade. “Markets are learning to moderate their volatility as Trump’s trade strategies unfold.”
This extension follows a pattern of brinkmanship seen in prior trade disputes. A reciprocal tariff framework, introduced in April, initially set EU import duties at 20%, later reduced to 10% temporarily. The new deadline creates room for further negotiations and a possible long-term trade resolution.
With optimism growing for a deal, cyclical stocks—those tied to the economic cycle—have rebounded sharply. The Stoxx Europe 600 has jumped about 18% from its April lows, although it did pull back slightly last week amid tariff concerns.
While the UK market remained closed due to a holiday, the rest of Europe responded positively to the latest developments. For now, investors seem cautiously hopeful that diplomacy may avert another round of damaging tariffs.
