Trump's cancellation of the threat to impose tariffs on Europe is not a "shift towards moderation," but a pragmatic compromise

Trump's withdrawal of the threat to impose additional tariffs on Europe may appear to be a softened stance on the surface, but from a political and economic reality perspective, it is more like a phased compromise rather than a change in position. In the current environment, the United States is already struggling to manage the pressures of multi-front domestic and international conflicts simultaneously.
From an economic standpoint, the trade relationship between Europe and the US is highly intertwined, and any substantial escalation of tariffs would directly increase inflationary pressures. Given that inflation has not yet fully receded, reigniting imported inflation does not align with the US domestic economic interests.
From a political perspective, Trump needs a "tough stance" rather than a "real cost." Tariff threats are inherently negotiation tools; once they touch the cost-bearing zone of his core interests, strategic adjustments will occur. Cancelling the threat does not mean abandoning a tough approach but rather leaving room for subsequent negotiations.
Market interpretation of this move is also relatively rational. Risk assets have not reacted extremely, indicating that capital has long been accustomed to the rhythm of "words first, policies lagging." This kind of news is more about reducing tail risks than changing the overall trend.
Therefore, this action should not be simply understood as positive or negative, but as an emotional recovery after risk release.