Trump’s trade deals. Credit: Joshua Sukoff, Shutterstock
US President Donald Trump has declared a “total reset” in US-China relations after the two nations agreed to a 90-day reduction in tariffs – triggering a stock market rally today, May 13, 2025.
This raises fresh questions about Europe’s position in global trade.
Tariffs slashed and trade war de-escalates
In a joint announcement, US and Chinese officials confirmed that mutual tariffs will be sharply reduced starting Wednesday, May 14:
- US tariffs on Chinese imports will drop from 145 per cent to 30 per cent
- Chinese tariffs on US goods will fall from 125 per cent to 10 per cent
The move comes after months of escalating trade tensions, with both governments agreeing to open a new round of negotiations. President Trump said at the White House that they had achieved a “total reset with China,” and added that he doesn’t expect tariffs to return to previous levels, cited by BBC.
Markets react positively in the US
Following the announcement, Wall Street surged:
- The Nasdaq jumped more than 3.3 per cent in early trading
- Companies that import goods from China saw immediate share price rises
BBC business correspondent Natalie Sherman noted that markets are now trading at similar levels to the start of the year, recovering from steep drops following Trump’s “Liberation Day” tariff announcement in April.
But while Washington struck a triumphant tone, the mood in Beijing was more cautious. BBC’s Theo Leggett reported that Chinese businesses are wary, expecting tariffs to return after the 90-day pause. A Chinese industry insider said, “30 per cent is still a high tariff.”
EU left out by Trump?
As the US secures back-to-back deals with the UK and now China, the European Union seems sidelined. According to Politico, the EU’s attempts to secure tariff relief have gone nowhere since Trump imposed new levies in April:
- 10 per cent baseline tariffs
- 25 per cent on cars and metals
- Potential 20 per cent increase if no deal is reached by early July
On Monday, May 12, Trump described the EU as “nastier than China” and claimed “The European Union was formed in order to screw the United States.”
Agathe Demarais of the European Council on Foreign Relations, told Politico: “Europe is not a priority for the US … and that is a bit of a surprise for Europeans.”
Trump arrives in Saudi Arabia
Today, May 13, Trump landed in Riyadh to begin a three-day Middle East tour. He was greeted by Crown Prince Mohammed bin Salman, the architect of Vision 2030, Saudi Arabia’s controversial economic reform project, according to Sky News.
The meeting is likely to spark global interest, not just due to investment ties, but also MBS’s past involvement in the murder of journalist Jamal Khashoggi, which triggered international condemnation.
What now for Europe?
Trump is striking deals with both adversaries and allies, but the EU is still waiting. Politico cited Josh Lipsky, senior director at the Washington-based Atlantic Council think tank, “countries like India and Japan, and even Vietnam, are higher on the priority list than the EU.”
If the EU can’t secure its own agreement before July, it risks facing even higher tariffs, potentially up to 20 per cent, on key exports like cars and metals. That could damage European manufacturers, raise consumer prices, and further strain political unity inside the bloc.
Is the EU being punished for its bureaucracy – or is it simply playing the long game while others chase quick wins?
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