London (AFP) - Europe eked out small gains but Wall Street was flat Tuesday after President Donald Trump extended his tariffs deadline and hinted at a further pushback, though uncertainty over US trade policy capped gains.

Shortly before the three-month pause on his “Liberation Day” tariffs was set to expire, Trump said he would give governments an extra three weeks to hammer out deals to avoid sky-high levies on exports to the world’s biggest economy.

“The Trump administration’s latest announcements on tariffs offered some relief to financial markets,” noted AJ Bell investment analyst Dan Coatsworth.

“On the flipside, this only extends the uncertainty with markets likely to spend the next three weeks trying to guess the ultimate outcome.”

Trump has sent out letters to more than a dozen countries – including top trading partners Japan and South Korea – setting out what he intends to charge should they not reach agreements by August 1, which replaces Wednesday’s deadline.

Investors tentatively welcomed the delay amid hopes officials will be able to reach deals with Washington, with some observers seeing the latest move by the president as a negotiation tactic.

The letters said Japan and South Korea would be hit with 25-percent tariffs, while Indonesia, Bangladesh, Thailand, South Africa and Malaysia faced duties ranging from 25 percent to 40 percent.

When asked if the new deadline was set in stone, the president said: “I would say firm, but not 100 percent firm.”

Wall Street stood flat two hours into trading while London, Paris and Frankfurt all ended with meagre gains of around 0.5 percent at the close.

EToro US investment analyst Bret Kenwell sees investors as being torn between risk and opportunity.

“While trade tension may be on the rise again, investors should remember that we’re just one session removed from record highs in the S&P 500 and Nasdaq,” he said.

Asian equity markets ended mostly higher, including a 0.3 percent gain in Tokyo.

“Tokyo’s resilience suggested that investors are treating the move as a headline risk rather than a market-altering shock – at least for now,” said David Morrison, senior market analyst at Trade Nation.

Wendy Cutler, vice president at the Asia Society Policy Institute, said the levies on Japan and South Korea “will send a chilling message to others”.

“Both have been close partners on economic security matters,” she said, adding that companies from both countries had made “significant manufacturing investments in the US in recent years”.

The dollar was trading mixed against main rivals while oil prices recovered from earlier dips as Brent crude clambered back to the $70 mark.

- Key figures at around 1545 GMT -

New York - Dow: FLAT at 44,346.89 points

New York - S&P 500: FLAT at 6,319.49

New York - Nasdaq Composite: FLAT 0.2 percent at 20,413.80

London - FTSE 100: UP 0.5 percent at 8,854.18 (close)

Paris - CAC 40: UP 0.6 percent at 7,766.71 (close)

Frankfurt - DAX: UP 0.6 percent at 24,206.91 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 39,688.81 (close)

Hong Kong - Hang Seng Index: UP 1.1 percent at 24,148.07 (close)

Shanghai - Composite: UP 0.7 percent at 3,497.48 (close)

Euro/dollar: DOWN at $1.1708 from $1.1710 on Monday

Pound/dollar: DOWN at $1.3567 from $1.3602

Dollar/yen: UP at 146.83 yen from 146.13 yen

Euro/pound: UP at 86.30 pence from 86.09 pence

West Texas Intermediate: UP 0.4 percent at $68.22 per barrel

Brent North Sea Crude: UP 0.2 percent at $70.01 per barrel

burs-cw/giv