- Trump threatened a 50% tariff on EU items and a 25% levy on iPhones until Apple strikes manufacturing to the U.S.
- The bulletins rattled markets, with the S&P 500, Nasdaq, and European shares all sliding over 1%.
- EU commerce talks have stalled, and analysts warn tariffs may increase costs on all the pieces from automobiles to olive oil.
President Trump lit up international markets on Friday with not one, however two aggressive commerce threats—first, a 50% tariff on all items from the European Union beginning June 1, and second, a 25% levy on Apple’s iPhones until the corporate begins constructing them within the U.S.
The announcement, made on Fact Social, got here simply as markets had began to breathe a bit after weeks of de-escalation. However that calm didn’t final lengthy. Inside minutes, the S&P 500 dropped 1%, the Nasdaq fell 1.2%, and European sharbes slipped 1.5%.
Commerce Talks Stalling—and Trump’s Completed Ready
The EU risk appears to stem from the White Home’s rising frustration that talks with Brussels are, effectively, dragging. “Our discussions with them are going nowhere!” Trump posted. He additionally accused the EU of present primarily “to benefit from the US on TRADE.”
U.S. Treasury Secretary Scott Bessent echoed the frustration, saying on Fox Information that the transfer was meant to “gentle a hearth beneath the EU.” In the meantime, EU commerce chief Maros Sefcovic was anticipated to talk with U.S. Commerce Rep Jamieson Greer later that day, although no updates had been launched at press time.
Over in The Hague, Dutch PM Dick Schoof shrugged it off, calling it probably simply one other “transfer within the negotiation dance.” Nonetheless, EU envoys met in Brussels Friday to speak commerce technique.
Apple’s within the Sizzling Seat—Once more
Trump additionally used the chance to take one other shot at Apple, warning he may hit all iPhones bought within the U.S. with a 25% import tax until they begin manufacturing within the States. “I’ve instructed Tim Cook dinner already,” Trump posted. “No extra iPhones from India or wherever—they need to be made right here, in America.”
Apple, for its half, stayed quiet. The corporate has been slowly shifting some manufacturing to India and dedicated to a $500 billion U.S. funding—however that doesn’t embrace home iPhone manufacturing.
Authorized specialists say it’s unclear whether or not Trump may even do what he’s threatening. “There’s no direct authority for company-specific tariffs,” stated Sally Stewart Liang of Akin Gump. “They’d have to make use of emergency powers or undergo prolonged commerce investigations.” Both means, Apple shares nonetheless dropped 2.5% on the day.
Markets React, Analysts Cautious
Trump’s tariff volley comes simply weeks after he paused a lot of the April-announced “Liberation Day” tariffs, which had focused practically each nation on Earth. He stored a ten% base tariff and scaled down a large 145% tariff on China to 30%, partly in response to fentanyl considerations.
Citigroup’s chief economist Nathan Sheets summed up the nervous temper: “We would nonetheless get a deal right here, but when there’s one area that makes me sweat—it’s the EU.”
A 50% tariff may slam shopper costs throughout the board—German automobiles, French wine, Italian olive oil, you title it. The EU shipped round €500 billion in items to the U.S. final yr, led by Germany, Eire, and Italy. Massive industries like pharma, automobiles, chemical substances, and plane are all within the hazard zone.
Volvo’s CEO Hakan Samuelsson added that if tariffs occur, customers will foot the invoice. “The smallest automobiles? We would not be capable of carry these to the U.S. in any respect.”
However regardless of all of the back-and-forth, he’s nonetheless holding out hope: “It doesn’t profit anybody if commerce between the U.S. and Europe shuts down. It’s simply unhealthy enterprise.”