Buckle Up, the Journey Far from Over: Analysts Warn of US-EU Trade War Risks.

The Risk of Trade Tensions Remains High

Despite the US delaying the introduction of a 50% tariff on EU goods, market analysts warn of a high risk of escalation in trade conflicts between countries.

The agreement between US President Donald Trump and European Commission President Ursula von der Leyen to postpone tariffs from June 1 to July 9 sparked a positive reaction in European stock markets.

European stocks recovered on Monday morning after a Friday drop amid threats of new US tariffs.

Chief economist at Berenberg, Holger Schmiding, believes that the postponement of tariffs could create an opportunity for a trade deal, although it will not resolve all issues.

'This is mainly a question of political will, and it somewhat depends on the American side,' he said in an interview with 'CNBC.'

If no agreement is reached, the European Union has a choice between reducing tariffs to 10% or implementing countermeasures against the US, which could lead to an escalation of the conflict.

'The EU-US trade dance is a high-stakes tango, and July 9 is the next flashpoint,' expressed the view of the chief investment officer of Zaye Capital Markets in London.

Analysis

The agreement between the US and the European Union remains unfinished; however, the postponement of tariffs keeps some hope for stabilizing the situation. Nevertheless, there is a risk of further escalation between the parties, which could lead to instability in the markets and negatively impact the global economy.