REUTERS/Adam Gray
Trump Threatens 50% Tariff on EU Goods and 25% iPhone Import Tax; Global Markets Rattle
BRUSSELS/BANFF/THE HAGUE, May 24 (Reuters) — U.S. President Donald Trump reignited fears of a global trade war on Friday, threatening a sweeping 50% tariff on all European Union imports starting June 1 and announcing plans for a 25% import tax on iPhones and other smartphones sold in the United States but manufactured abroad. The announcements, made via social media and later reiterated in the Oval Office, sent global markets into a tailspin.
Stock markets in the U.S. and Europe fell sharply, the dollar weakened, and U.S. Treasury yields declined amid investor concerns over slower economic growth. Gold prices rose as investors sought safe-haven assets.
Tariff Escalation Amid Stalled EU Talks
Trump’s renewed tariff threats follow what he described as unsatisfactory progress in negotiations with the European Union. “I’m not looking for a deal,” the president stated. “We’ve set the deal – it’s at 50%. But again, there’s no tariff if they build their plant here.”
The administration has long complained about what it views as unfair EU restrictions on American goods, particularly automobiles. The proposed tariff would affect a wide range of products, from German cars to Italian food and luxury items. EU exports to the U.S. totaled approximately €500 billion ($566 billion) in 2024, with Germany, Ireland, and Italy among the leading exporters.
EU Trade Commissioner Maros Sefcovic emphasized the bloc’s commitment to reaching a balanced trade agreement and urged that discussions be governed by “mutual respect, not threats.” Dutch Prime Minister Dick Schoof downplayed the rhetoric, calling it a recurring negotiation tactic from Washington.
Targeting Apple and Global Supply Chains
In a significant shift, Trump also proposed a 25% levy on all imported smartphones, singling out Apple. The company, headquartered in California, manufactures most iPhones abroad—primarily in China and increasingly in India. Trump warned the tariff would apply to all phone makers, including Samsung.
“Tim Cook knows. I told him long ago,” Trump wrote on Truth Social, referencing his conversations with Apple’s CEO. “I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else.”
Analysts and industry observers argue such a move is logistically and economically challenging. Apple has announced plans to shift more production to India by 2026, but domestic U.S. production of smartphones on a mass scale remains implausible in the near term. A forced relocation would significantly increase retail prices for U.S. consumers, potentially adding hundreds of dollars per device.
Apple shares fell 3% on Friday following the announcement. The company declined to comment publicly.
International and Market Reactions
Trump’s comments followed a round of discussions between U.S. and EU officials, as well as meetings with Japanese trade representatives. Japan’s chief negotiator Ryosei Akazawa described talks as more candid and in-depth than previous meetings but emphasized Japan would not rush an agreement. “In negotiations, the party stuck to a deadline usually loses,” he said.
Trump’s approach to trade has created uncertainty in global markets. Earlier this year, he imposed a sweeping 145% tariff on Chinese imports, later reduced to 30%, and paused further tariffs in April amid market turmoil. A 10% baseline tariff remains in effect on most global imports.
The Group of Seven (G7) industrialized nations attempted to minimize tensions earlier this week at a summit in the Canadian Rockies, but the renewed threats appear to signal a return to aggressive U.S. trade policies.
Broader Implications
Trump’s latest moves reflect a broader strategy of economic nationalism, pressuring foreign governments and multinational corporations to shift production to the U.S. However, critics warn of rising consumer costs, disruption to global supply chains, and potential retaliation from trade partners.
Kathleen Brooks, research director at XTB, remarked, “The EU is one of Trump’s least favorite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two.”
U.S. Treasury Secretary Scott Bessent hinted that more trade actions may follow when the current 90-day tariff pause expires in July.
As the June 1 deadline approaches, the administration’s confrontational trade posture—alongside fragile international diplomacy—continues to inject volatility into the global economy.
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