U.S. President Donald Trump has reignited trade tensions by threatening a 50% tariff on European Union imports starting June 1 and a 25% levy on all imported iPhones. The announcements, made via social media, triggered a selloff in global markets, pushing gold prices up while U.S. stocks and Treasury yields fell amid fears of slowing economic growth.
Trump criticized the EU for slow trade talks and warned Apple that future iPhones sold in the U.S. should be manufactured domestically. He later added the proposed smartphone tariff would apply to all foreign brands, including Samsung. Apple shares dropped 3% following the threat, though the company declined to comment.
The EU exported about €500 billion ($566B) in goods to the U.S. last year, with Germany, Ireland, and Italy leading the way. A 50% tariff could significantly raise prices on cars, olive oil, and pharmaceuticals. EU trade chief Maros Sefcovic emphasized mutual respect in trade, while Dutch PM Dick Schoof called the threat part of ongoing negotiations.
While talks with the EU remain tense, U.S.-Japan trade discussions appeared more constructive, focusing on economic security and trade expansion. Japan's negotiator Ryosei Akazawa cautioned against rushing any deal.
Trump’s move could undermine earlier tariff pauses that had eased market tensions. Apple, already increasing iPhone production in India, may struggle to meet U.S. manufacturing demands. Analysts say relocating production to the U.S. would drive up costs and may not be feasible in the near term.
Trump reiterated his stance: "There’s no tariff if they build their plant here." As the deadline looms, markets remain on edge over a potential tariff escalation with global consequences.