Athira Sethu
Kochi, 26 May 2025
United States President Donald Trump has made up his mind to hold off on imposing a 50% tax (referred to as a tariff) on products from the European Union (EU). The tax was initially set to begin on June 1, but this has now been rescheduled for July 9.
Trump has announced that he is providing additional time for the EU and the U.S. to negotiate and attempt a trade agreement. He did so after speaking over the phone with Ursula von der Leyen, President of the European Commission (the EU’s executive arm).
Von der Leyen informed Trump during their call that she wishes to sit down and discuss trade seriously. Trump agreed and mentioned that she assured him that she would work expediently to reach an agreement.
Prior to this phone call, Trump had written on social media that the EU was being extremely difficult to work with on trade matters. He complained that the talks were not going anywhere and threatened to initiate the 50% tariff on June 1 if things did not change.
But after speaking with von der Leyen, Trump then decided to postpone the tariff. He stated that it was his call and he was willing to provide additional time for the negotiations. Trump explained to reporters in New Jersey, “I told everybody that they have to try to make a deal.”
Von der Leyen also weighed in. She indicated that the U.S. and Europe have a good trade relationship. She stated that Europe would be willing to move fast in order to come to a good agreement. But she stated they need more time and hope to complete the deal by July 9.
So presently, the tariff will not commence. The two sides are attempting to resolve matters amicably through further negotiations.
What is a tariff?
A tariff is a tax that is placed on imports from another country. It increases the price of those imports. Occasionally, tariffs are used by nations in times of trade disputes.
What’s next?
The U.S. and EU will keep negotiating. If they can reach an agreement on a good trade deal, the 50% tariff might never come into effect. But if negotiations collapse, the tariff might become effective on July 9.
