Trump intends to impose a 50% tariff on European goods unless the EU accommodates his demand for Apple and other tech companies to manufacture their products within the United States, with iPhones being subject to a 25% tariff.
After declaring a stalemate in trade talks with the European Union, former U.S. President Donald Trump has announced plans to instate a 50% tariff on EU imports, effective from June 1, 2025. This announcement marks an escalation in the ongoing trade dispute between the two parties, which Trump has consistently criticized for allegedly being designed to disadvantage the U.S.
Trump shared his intentions on his Truth Social platform, suggesting there would be no tariff if the imported products were manufactured or built within the U.S. The European Commission has yet to respond, with top trade figures planning to hold a call later on Friday before issuing a statement.
European stock markets reacted negatively to Trump's declaration, with the FTSE 100 in London, the DAX in Germany, and the CAC 40 in France all experiencing significant decreases. The U.S. stock markets also dipped at the open on Wall Street, with the tech-focused Nasdaq experiencing a decline of over 1%.
The potential economic impact of the proposed tariffs saw Brent crude oil prices fall by more than 1% to $63 per barrel. Furthermore, the U.S. dollar took a hit as market worries over the sustainability of U.S. government debt levels were intensified by the news.
Trump previously accused Apple of manufacturing iPhones primarily in India and China, demanding that the company move production to the U.S. Apple shares dropped more than 2% in premarket trading following the warning, which was also posted on Truth Social.
In April 2025, Trump announced "Liberation Day" tariffs, imposing a 10% tariff on nations trading with the U.S. and additional reciprocal tariffs for some countries, including a 20% tariff on EU imports. The EU has traditionally maintained a strong stance against unilateral tariff actions, emphasizing the importance of maintaining open and fair trade practices.
[1] Financial Times report, May 24, 2025 - The EU's annual trade deficit with the U.S. reportedly surpassed $250 million, fueling Trump's concerns and allegations of unfair trade barriers. On the other hand, some reports suggest that Apple is planning to expand its India supply chain through a key contractor, potentially countering Trump's demands for American-based production.
[1] The escalation in the U.S.-EU trade dispute, as announced by former President Trump, could have significant implications for business and investing, with potential tariffs threatening to disrupt cross-border trade relationships.
[2] In light of Trump's proposed tariffs and his criticisms of American businesses, such as Apple, investing in firms that prioritize domestic manufacturing may become a focal point for policy-and-legislation and politics.
[3] The financial sector, including stock-market participants, should closely monitor this developing situation, as negative reactions in stock markets around the world, such as the decline in European and U.S. markets previously mentioned, suggest a volatile market environment.
[4] General news outlets will likely continue to follow the trajectory of this trade conflict, as well as any subsequent responses and countermeasures from the European Commission and the U.S. government, to assess the potential long-term effects on finance, business, and the global economy.
