President Donald Trump launched an intensified trade conflict by announcing major tariff plans that include both EU imports and a proposed 25% tax on Apple Inc. iPhones which are not produced in the United States.
Trump expressed his disappointment about the slow EU and Washington diplomatic progress on his Truth Social post first thing in the morning. “Our discussions with them are going nowhere!” he wrote. The proposed 50% tariff on all EU goods will begin on June 1 unless meaningful progress occurs.
The new policy represents a significant increase in Trump administration trade strategy which puts the vital economic alliance between the two regions at risk of disruption. The move coincides with upcoming trade negotiations that EU and U.S. officials plan to conduct this week.
Trump once more started a dispute with Apple through his threat to place a 25% tariff on iPhones manufactured outside of the United States. The statement to Tim Cook from Trump established his expectation for iPhone manufacturing within the United States. “I have long ago informed Tim Cook of Apple that I expect their iPhones… will be manufactured and built in the United States,” he wrote. “If that is not the case, a tariff of at least 25% must be paid by Apple to the U.S.”
The threat of new tariffs caused market reactions before the government confirmed any official executive order. The U.S. stock market declined alongside European stocks with Apple stocks dropping by 2% while the S&P 500 index fell by 1%. Germany’s DAX and France’s CAC 40 indexes also dropped.
Trade experts believe the current tariff threat serves as a negotiating tool rather than being a established policy. “This is a threat, not a done deal,” said Aslak Berg, of the Centre for European Reform. The proposed measures will create an intense atmosphere during upcoming talks.
The EU maintains a position of silence. The EU proposed eliminating all tariffs between the two parties yet Trump refused this offer in order to keep the 10% baseline.
The implementation of Trump’s proposed tariffs would lead to major disruptions in worldwide supply networks and the EU would likely respond with quick retaliatory measures. Market participants and policymakers currently await future developments as they prepare for upcoming events.
