Transatlantic Trade Monitor: Facts You Need Now | The Art of the Deferral: Navigating the Trade Truce

By Ian Hunter, Director, OCO Global

“I never get too attached to one deal or one approach“. Chapter 2 of the Art of the Deal, “Trump Cards: The Elements of the Deal”.

In The Art of the Deal, President Trump underscores the significance of flexibility and the avoidance of excessive structure. Rigid agendas, he believes, can stifle innovation – particularly when market demands require an adaptable approach to capitalize on challenging opportunities. It’s a strategy that shaped his business empire, and now drives his every political move.

True to his word, the President’s philosophy was exported to the world twice within the last week. Embodying this approach, President Trump declared April 2, 2025, as “Liberation Day,” unveiling a comprehensive set of tariffs aimed at redefining the United States’ economic relationships with its global trading partners. This initiative introduced a universal 10% tariff on all imports, with higher, country-specific rates for approximately 60 nations – including a 34% tariff on Chinese goods. The announcement was framed as a “declaration of economic independence,” intended to bolster domestic manufacturing and address long-standing trade imbalances. By now, we are intimately familiar with the international response to President Trump’s Liberation Day tariffs – a reaction not unlike the seven stages of grief.  In the span of a week, the world’s major trading partners cycled through shock, denial, anger, bargaining, depression, testing, and acceptance – each with their own economic theater of expression.

Denial and Diplomacy (Day 1)
At first, the announcement stunned global markets. Trading floors fell quiet; finance ministers issued carefully worded statements of “concern.” The United Kingdom chose a quieter path through the early stages lingering somewhere between denial and diplomacy. As one of America’s closest allies and post-Brexit champions of global free trade, the UK resisted the impulse to retaliate immediately. Instead, it emphasized dialogue and restraint, signaling its discomfort through diplomatic channels rather than economic ones. London’s approach was clear: hold fire, keep talking, and quietly lobby behind the scenes.

Anger (Day 2–3)
Then came the fury.  China, accustomed to playing the long game, did not linger in denial. Within 48 hours, Beijing unleashed its response: a sweeping 34% tariff on all U.S. imports and tight restrictions on rare earth mineral exports.  A move many interpreted as China playing its own trump card.  There was no hesitation, no hedging.  This wasn’t just economic retaliation, it was a deliberate act of economic theater, signaling that Beijing would not be cornered. Where others wavered, China’s Ministry of Commerce struck a defiant tone: “If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end.” This declaration marked not a moment of anger, but perhaps the beginning of a prolonged trade conflict—an unapologetic commitment to match U.S. actions with equal or greater intensity.

Bargaining (Day 4)
The European Union, by contrast, sought to enter the bargaining phase. Brussels drafted a cache of retaliatory tariffs targeting $23 billion worth of U.S. goods—from soybeans to motorcycles. But even as the EU announced these measures, it left the door open for talks. These weren’t wild swings.  They were measured blows, crafted to bring the U.S. back to the negotiating table. European Commission President Ursula von der Leyen captured this stance, stating: “The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial.”

Depression (Day 5)
Markets slumped. Corporations voiced panic. U.S. allies like Mexico and South Korea, caught in the geopolitical crossfire, grew weary. Their responses were muted.  Tariffs, yes, but coupled with statements of regret. This was the depression phase: a quiet, diplomatic mourning for the former rules-based order.

Testing (Day 6)
By now, countries began testing what they could gain. Would the U.S. really hold its line?  Would negotiation be rewarded—or punished? India imposed narrow, targeted tariffs – on apples and almonds – but paused for effect, watching to see whether escalation or restraint would yield greater leverage. This phase was cautious, strategic, and purposefully limited.

Acceptance (Day 7)
President Trump’s surprise announcement of a 90-day pause on all non-China tariffs shifted the mood from escalation to seizing a moment of collaboration. Sensing an opportunity to negotiate, the European Union moved swiftly suspending its retaliatory tariffs, signaling a recalibration of intent. This was not surrender.  It was acceptance in its most strategic form: a quiet recognition that long games are rarely won through bombastic moves. Brussels understood that doubling down on confrontation might only deepen the impasse. Perhaps, in adapting to the Trump administration’s fluid tactics, the EU chose to preserve its leverage through measured restraint. Expressing a shared commitment to pursuing equitable trade, President Trump stated in a joint appearance with then-European Commission President Jean-Claude Juncker: “We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”

Targeted Exemptions and Regulatory Harmonization
So what might the next 90 days hold? The EU has proposed a “zero-for-zero” tariff arrangement, aimed at eliminating tariffs on industrial goods, including automobiles, to mitigate the economic shock. Ursula von der Leyen reaffirmed this position: “We stand ready to negotiate with the US. Indeed, we have offered zero-for-zero tariffs for industrial goods as we have successfully done with many other trading partners.” This proposal reflects the EU’s intent to reduce barriers and reframe its economic relationship with the United States as one of balance and reciprocity.

Digital Trade and Technology Sector Engagement
Despite the tariff pause, the EU is proceeding with major antitrust fines against U.S. tech giants under the Digital Markets Act (DMA). Companies such as Meta and Apple face significant penalties. EU officials have emphasized that these actions are not part of trade retaliation, but reflect independent regulatory enforcement meant to ensure consumer protection and market fairness.

Green Technology and Sustainable Trade Initiatives
The EU is also advancing its green trade agenda, particularly through mechanisms like the Carbon Border Adjustment Mechanism (CBAM). This policy aims to prevent carbon leakage by imposing costs on imported goods with high carbon footprints, ensuring a level playing field for EU producers. In parallel, the European Green Deal outlines sweeping strategies to build climate-neutral circular economies, support clean energy technologies, and modernize core industrial sectors.

Strategic Stillness: A Calculated Wait
These moves underscore the EU’s proactive, multifaceted approach to navigating a rapidly evolving trade environment. Whether pushing for exemptions, pursuing regulation in digital markets, or reasserting leadership in green innovation, the EU is using this 90-day window to strategize, not stall. That test will play out in quiet backchannels, in closed-door meetings in Geneva and Washington, and in subtle financial signals from Frankfurt and The City of London. Expect to see the EU push for targeted carve-outs, regulatory harmonization, and renewed engagement on digital trade and sustainable industries—sectors where European capital seeks both protection and expansion.

President Trump’s Truce
If Liberation Day marked a rupture, President Trump’s truce provides time for recalibration. On one front, China has made it clear it will not blink. Its immediate retaliation and uncompromising rhetoric have set the tone for a drawn-out confrontation. The Chinese government’s declaration that it has the means to “fight to the end” was no idle warning—it marked the beginning of what could become a new phase of economic decoupling. With U.S. tariffs on Chinese imports now exceeding 100%, near-term reconciliation looks increasingly unlikely. Instead, China may double down on Belt and Road alliances, strengthen trade ties with non-aligned partners, and weaponize rare earth mineral exports to expand its leverage beyond the balance sheet.

Meanwhile, in Europe, the trade calculus is different. The EU’s decision to suspend retaliatory measures—after the President’s 90-day tariff freeze on non-China partners—has been interpreted not as capitulation, but as tactical patience. In capitals like Berlin, Paris, and Brussels, under pressure from domestic exporters and industry groups, the emphasis now is on restoring stability without appearing weak. Privately, EU officials have expressed cautious optimism. One senior diplomat, quoted on April 10 in Le Monde, stated: “We are treating the next 90 days not as a ceasefire, but as a test of intentions.” President Trump, for his part, appears to welcome this recalibration. His earlier words with Jean-Claude Juncker now read as a guiding maxim: “We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”

Trading in Leverage
In other words, the door is still open. And in the art of the deferral, the pause is not a retreat—it’s a prelude. One that sets the stage for what may follow: a world trading not just in goods—but in leverage.

Compliments of OCO Global – a member of the EACCNY