Trade War Averted? Markets React as Trump Cancels EU Tariffs

Amid ongoing trade tensions, President Trump has canceled the planned tariffs on several European countries that were set to take effect on Feb 1. The move immediately eased fears of escalation and injected fresh optimism into global markets.
📈 Market Impact So Far
Equities responded positively as investors priced out short-term trade risk. European exporters and U.S. industrial stocks saw renewed interest, while overall risk sentiment improved. The decision also reduced the likelihood of immediate retaliatory measures from the EU, helping stabilize cross-border trade expectations.
🌍 Bigger Picture
While this easing signal supports markets in the near term, it doesn’t fully eliminate trade uncertainty. History shows that tariff pauses without long-term agreements often lead to temporary relief rallies, not sustained trend reversals. Investors remain alert to policy reversals or renewed pressure if negotiations stall.
🔎 What to Watch Next

Follow-up trade talks and concrete policy commitments

Reaction in the USD and global bond yields

Whether risk-on sentiment can hold beyond the headline news

Bottom line:
This move reduces immediate downside risk and supports short-term market confidence, but lasting bullish momentum will depend on consistent policy clarity, not just tariff rollbacks.
‍#TrumpWithdrawsEUTariffThreats